Issues in the Economic Evaluation of Prevention Programs

Economic analysis plays an increasingly important role in prevention research. In this article, we describe one form of economic analysis, a cost analysis. Such an analysis captures not only the direct costs of an intervention but also its impact on the broader social costs of the illness or problem targeted. The key question is whether the direct costs are offset by reductions in the other, morbidity-related costs, such as the use of expensive services. We begin by describing how economists think about costs. We then outline the steps involved in calculating the costs of delivering an intervention, including both implicit and explicit costs. Next we examine methods for estimating the morbidity-related costs of the illness or problem targeted by the intervention. Finally, we identify the challenges one faces when conducting such an analysis. Throughout the article, we illustrate key points using our experiences with evaluating the Fast Track intervention, a multiyear, multicomponent intervention targeted to children at risk of emotional and behavioral problems.