Evaluation of public investment in health care

The application of developments in economic theory to the evaluation of 'Risky' public health programs is discussed and it is shown that the use of expected values as measures of outcome in such programs is inappropriate.

Abstract

In this note we discuss the application of developments in economic theory to the evaluation of 'Risky' public health programs. We show that the use of expected values as measures of outcome in such programs is inappropriate. Instead we suggest the use of certainty equivalent values measured by a direct assessment (the 'Standard Gamble') as an appropriate way to evaluate the outcome.