Worksheet 3: Cost-Benefit Analysis

Worksheet 3: Cost-Benefit Analysis#

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Case study: Preventative care#

  1. How should we quantify cost/benefit?

  2. What are sources of cost?

  3. What are the benefits? How can we measure them?

Costs#

Set up a Fermi-style calculation for the cost of putting all U.S. adults with cholesterol \(\ge 240\) on this medication. Remember to account for indirect costs.

Benefits#

Set up a Fermi-style calculation for the benefit of putting all U.S. adults with cholesterol \(\ge 240\) on this medication. How can you account for non-monetary benefits?

Analysis#

Let’s put together our cost-benefit analysis. Do the benefits outweigh the costs?

Robustness#

  • Which components of our calculation are we least confident in?

  • Does our conclusion change if we vary them?

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