The Willingness-To-Pay Approach: Caveats to Biased Application

Abstract

For an economist, it is quite obvious that cost-benefit analyses (CBA) provide a useful instrument for public decision making in the health care sector. Better information on the alternatives available allows to improve the efficiency of decision making. This is especially important since health care absorbs a significant and in most countries increasing share of national income⁽²⁾. On this background, efficiency becomes a major problem for public policy. At least partially, CBA already has been used to improve policy planning in the health care sector⁽¹⁾. Thus, the question is not the usefulness of CBA in general but whether these techniques can be adapted sufficiently to the specific problems of health care policy.