Cost-benefit analysis — cba • healthiar

This function performs a cost-benefit analysis

Usage

cba(
  output_attribute = NULL,
  impact_benefit = NULL,
  valuation,
  cost,
  discount_rate_benefit = NULL,
  discount_rate_cost = NULL,
  inflation_rate = NULL,
  discount_shape = "exponential",
  n_years_benefit = 1,
  n_years_cost = 1
)

Arguments

output_attribute: List produced by healthiar::attribute() or healthiar::compare() as results.
impact_benefit: Numeric value referring to the positive health impact as result of a reduction of harmful exposure.
valuation: Numberic value referring to unit value of a health impact.
cost: Numeric value referring to the investment cost to achieve the reduction of exposure.
discount_rate_benefit, discount_rate_cost: Numeric value referring to the the discount rate used in the benefit and the cost side (respectively). Their values determine the approach of cost-benefit analysis: direct approach (if the same discount_rate is used for cost and benefit) and indirect approach (different discount rates).
inflation_rate: Numeric value between 0 and 1 referring to the annual inflation (increase of prices). Only to be entered if nominal (not real) discount rate is entered in the function. Default value = NULL (assuming no nominal discount rate).
discount_shape: String referring to the assumed equation for the discount factor. By default: "exponential". Otherwise: "hyperbolic_harvey_1986" or "hyperbolic_mazur_1987".
n_years_benefit, n_years_cost: Numeric value referring to number of years in the future to be considered in the benefit and cost side (respectively). Years for discounting and/or inflation. Be aware that the year 0 (without discounting/inflation, i.e. the present) is not be counted here. If a vector is entered in the argument impact, n_years does not need to be entered (length of impact = n_years + 1)

Value

This function returns a list containing:

1) cba_main (tibble) containing the main CBA results;

net_benefit (numeric column) containing the difference between benefit and cost (i.e. benefit - cost)
benefit (numeric column) containing discounted benefit (i.e. monetized attributable health impact)
cost (numeric column) containing discounted cost
And many more

2) cba_detailed (list) containing detailed (and interim) results.

benefit (list)
cost (tibble)

If the argument output_attribute was specified, then the two results elements are added to the existing output.

Details

Methodology

Information about the methodology (including corresponding equations and literature) is available in the package vignette. More specifically, see chapters:

References

Boardman AE, Greenberg DH, Vining AR, Weimer DL (2018). Cost-Benefit Analysis: Concepts and Practice, 5th edition. Cambridge University Press, Cambridge, UK. ISBN 978-1108401296.

Author

Alberto Castro & Axel Luyten

Examples

# Goal: performs a cost-benefit analysis using an existing output
# of a attribute_... function

output_attribute <- attribute_health(
  erf_shape = "log_linear",
  rr_central = 1.369,
  rr_increment = 10,
  exp_central = 8.85,
  cutoff_central = 5,
  bhd_central = 30747
)

results <- cba(
  output_attribute = output_attribute,
  valuation = 50000,
  cost = 100000000,
  discount_shape = "exponential",
  discount_rate_benefit = 0.03,
  discount_rate_cost = 0.03,
  n_years_benefit = 5,
  n_years_cost = 5
)

results$cba_main |>
  dplyr::select(benefit, cost, net_benefit)
#> # A tibble: 1 × 3
#>      benefit      cost net_benefit
#>        <dbl>     <dbl>       <dbl>
#> 1 151041153. 86260878.   64780274.