AbstractThis chapter suggests some good practice procedures in the assessment of the costs of an intervention. We intend it to be applicable to the entire range of types of economic evaluation studies—cost–benefit analysis (CBA), cost effectiveness analysis (CEA), cost–utility analysis (CUA), cost-minimizing analysis (CMA), and cost–consequence analysis (CCA)—but caution will have to be exercised in each context. Economic costs are not immutable entities that can be easily identified by the inspection of accounts. As has been explained earlier (see Chapter 2) the underlying idea of a cost is that it is a monetary sum representing the most valued alternative use of a resource (i.e., the opportunity cost). Costs will always be contingent on the perspective of a study and on the nature of the decision [classic references are Alchian (1959, 1968)]. For example, what appears as a cost in a study from the perspective of a workers’ compensation board might be a transfer from a societal perspective; what is not considered a cost in a study examining only the short term consequences of a possible decision may be a cost in a similar study taking a long-term view. Maintenance costs will be a significant cost component in a decision to introduce and maintain an item of equipment, but not in a decision to acquire it and sell it shortly thereafter. A decision to implement an occupational health and safety (OHS) intervention will invariably embody decisions about the timing (sooner versus later) and the speed (faster versus slower) of its introduction. Both typically affect costs: generally, the sooner the implementation the greater the cost; the faster the implementation the greater the cost. What is always true, however, is that the costs to be considered are the resource used as a result of the decision in question.
