ABSTRACT
This chapter outlines the implications of cost benefit principles for the conceptualisation of costs. It utilises these principles to discuss criteria by which cost should be measured. The chapter aims to compare the costs of community care and standard services. The comparison of the cost-effectiveness of alternative forms of care implies that some agencies are considering making a long-run commitment to one of them. The long-run commitment would result in different streams of costs and outputs through time between community care and standard services. The discussion of the costs of alternative modes of care requires the comparison of 'social costs' as well as the private costs. The estimates of the use of nursing time was based upon an assumption that an average visit to an elderly person would consume half an hour. The actual value of the social cost will depend on the elasticities of demand and supply of the goods.
