Scandinavian Working Papers in Economics

Karlstad University Working Papers in Economics,
Karlstad University, Department of Economics

No 1: A Comparison of Benefit Cost and Cost Utility Analysis in Practice: Divergent Policies in Sweden

Lars Hultkrantz () and Mikael Svensson ()
Additional contact information
Lars Hultkrantz: Örebro University
Mikael Svensson: Dept. of Economics, Postal: Dept of Economics, Karlstad University, Universitetsgatan 1, SE 651 88 Karlstad, Sweden

Abstract: We compare the implementation of Benefit-Cost Analysis (BCA) and Cost-Utility Analysis (CUA) as tools for making priorities in allocation of national public funds in the transport sector and health sector, respectively, in Sweden. While the principal distinctions between these methods are well known, less notice has been given to a number of other differences that have emerged as national and international practices have evolved over time along separate lines. We compare cost and benefit components and economic parameter values and find some surprising disparities. There are inconsistencies, both across methods and within each method. Both can be improved by learning from the other. We also find that some current practices conflict with the underlying welfare theory and/or insights from recent empirical analysis.

Keywords: Economic evaluation methods; Cost-Benefit Analysis; Cost-Effectiveness Analysis; Guidelines

JEL-codes: D61; H51; I18

34 pages, April 2, 2012

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cba_vs_cua_swopec_pdf_15440.pdf PDF-file 

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