CBA Exam 1

# CBA Exam 1 - Methods of Cost-Benefit Analysis Professor...

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Methods of Cost-Benefit Analysis, Professor Russell ANSWERS TO QUIZ, September 27, 2011 1. (25 points) After discounting, a vaccination program for children costs \$300 per person and produces 20.1 years of life per person. Not vaccinating costs \$100 and produces 20 years of life. Show and explain in words how to set up the calculations for the cost-effectiveness ratio. Do the calculation. A cost-effectiveness ratio compares two alternatives, call them 1 and 2. Let alternative 2 be the more expensive, more effective alternative. In this case program 2 is vaccination since it costs more per person but also produces more years of life per person. The cost-effectiveness ratio is the difference in costs (costs of the vaccination program minus costs of not vaccinating) divided by the difference in life-years (life-years from the vaccination program minus life-years from not vaccinating), as shown below. 2.

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## This note was uploaded on 12/09/2011 for the course CBA 311 taught by Professor Louiserussell during the Fall '11 term at Rutgers.

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CBA Exam 1 - Methods of Cost-Benefit Analysis Professor...

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