PRODUCTION GAINS IN COST-EFFECTIVE- NESS ANALYSES - A WELFARE-THEORETI- CAL APPROACH

In the literature on cost-effectiveness analyses, there has recently been considerable debate on <p> the way of measuring the production gain caused by a new treatment as well as its proper evaluation. <p> In this paper, we propose a general framework for the discussion of such questions in the form of a <p> general equilibrium model with separate health variables. It is shown how the standard methods of <p> cost-effectiveness and cost-utility analysis are derived from basic assumptions. Also, the question <p> of whether to choose the human capital or the frictional method in evaluating production gains can <p> be given an answer in this model.