Marginal costs and benefits

Abstract

Decision makers are interested in measuring the costs and benefits of various interventions, and sometimes they are presented with the average costs and benefits of alternative interventions and asked to compare these. Usually a newer intervention is being compared with an existing one, and the most appropriate comparison is not of average costs (and benefits) but of the extra--or marginal--costs (and benefits) of the new intervention. Reanalysis of the cost effectiveness ratio of biochemical screening of all women for Down's syndrome compared with age based screening shows that the marginal cost effectiveness of biochemical screening is 47,786 pounds, compared with an average cost effectiveness of 37,591 pounds. It may sometimes be difficult or costly to calculate marginal costs and benefits, but this should be done whenever possible.