Aggregation rules for cost-benefit analysis: a health economics perspective

Abstract

Few willingness-to-pay (WTP) studies in the health sector have used their results within a cost-benefit analysis (CBA), an essential step to informing resource allocation decisions. This paper provides an overview of aggregation methods, reviews current evidence of practice in the health sector, and presents estimates of the total economic value of a women's group programme to improve mother and newborn health using different aggregation rules. A contingent valuation survey was conducted with 93 women's group members, 70 female non-members and 33 husbands. Aggregation was conducted with and without the values of non-users, and with different units of aggregation. The unadjusted mean, median and a weighted mean transfer were used to aggregate values. Equity weights were introduced to adjust WTP for income. Total WTP more than doubled when the values of husbands were added to that of women, and increased over 10-fold when the values of women who were not members of the group were added. The inclusion of non-use values, and the unit of aggregation, had the greatest effect on results. Researchers must reach agreement on the most acceptable method of aggregating WTP values to promote the use of WTP in resource allocation decisions in the health sector.