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Water: Microbial

Thesaurus of Terms Used in Microbial Risk Assessment: 5.11 Economic Terms

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benefit

The degree to which effects are judged desirable.  (SRA 2004)

benefit-cost analysis

An economic method for assessing the benefits and costs of achieving alternative health-based standards at given levels of health protection.  (EPA 2005b)
RELATED TERMS: cost-benefit analysis

contingent valuation method

The use of surveys of individuals to elicit their preferences, measured in monetary terms (willingness to pay, or WTP), for a specified improvement in their health outcomes.  It circumvents the absence of markets for health outcomes by presenting survey respondents with hypothetical markets in which they are asked their WTP for the improvement in question.  (USDA 2004)

cost-benefit analysis
  1. An evaluation of the costs which would be incurred versus the overall benefits of a proposed action, such as the establishment of an acceptable exposure level of a pollutant.  (EPA 2004)
  2. A quantitative evaluation of the costs which would have incurred by implementing an environmental regulation versus the overall benefits to society of the proposed action.  (EPA 2005b)
  3. A comparison of alternative interventions in which costs and outcomes are quantified in common monetary units.  (NLM/NICHSR 2004)

A formal quantitative procedure comparing costs and benefits of a proposed project or act under a set of pre-established rules.  To determine a rank ordering of projects to maximize rate of return when available funds are unlimited, the quotient of benefits divided by costs is the appropriate form; to maximize absolute return given limited resources, benefits-costs is the appropriate form.  (RAIS 2004, SRA 2004)
RELATED TERMS: benefit-cost analysis

cost-effectiveness analysis
  1. A comparison of alternative interventions in which costs are measured in monetary units and outcomes are measured in non-monetary units, e.g., reduced mortality or morbidity.  (NLM/NICHSR 2004)
  2. An approach for comparing alternative programs or regulations when the benefits are difficult or impossible to translate into dollar terms.  The benefits are referred to as ‘effectiveness measures.”  Costs are measured in monetary terms.  Cost-effectiveness analysis employs a ratio analysis approach, for ranking alternative programs or regulations.  (NYS 1998)
cost-of-illness analysis

A determination of the economic impact of a disease or health condition, including treatment costs; this form of study does not address benefits/outcomes.  (NLM/NICHSR 2004)

cost-of-illness method           (ACRONYM: COI)

An approach that is used to estimate the societal costs of a particular illness or injury in a given time frame (typically a one-year period).  The approach typically focuses on two main types of societal costs associated with the particular illness or injury: direct medical and non-medical costs and indirect costs of lost productivity due to morbidity or premature mortality.  (USDA 2004)

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direct costs

Costs associated with resources expended for health care (compare with indirect costs); does not include lost wages.  (USDA 2004)
RELATED TERMS: indirect costs

direct medical costs

The costs of resources for medical treatment (such as the cost of a physician visit).  (USDA 2004)

direct non-medical costs

Costs incurred in connection with a health intervention or illness, but which are not expended for medical care itself (such as the transportation costs associated with a physician visit).  (USDA 2004)

disability-adjusted life year          (ACRONYM: DALY)
  1. A unit of health care status that adjusts age-specific life expectancy by the loss of health and years of life due to disability from disease or injury.  DALYs are often used to measure the global burden of disease.  (NLM/NICHSR 2004)

A quantitative indicator of burden of disease that reflects the total amount of healthy life lost, to all causes, whether from premature mortality or from some degree of disability during a period of time.  (World Bank 2000)
RELATED TERMS: contrast with quality-adjusted life year

discount rate
  1. The interest rate used to discount or calculate future costs and benefits so as to arrive at their present values, e.g., 3% or 5%.  This is also known as the opportunity cost of capital investment.  Discount rates are usually based on government bonds or market interest rates for cost of capital whose maturity is about same as the time period during which the intervention or program being evaluated.  For example, the discount rate used by the US federal government is based on the Treasury Department cost of borrowing funds and will vary, depending on the period of analysis.  (NLM/NICHSR 2004)
  2. A rate used in determining a present value equivalent of a future stream of dollars.  The lower the discount rate, the higher the present value of a future stream of dollars.  (USDA 2004)
discounting
  1. The process used in cost analyses to reduce mathematically future costs and/or benefits/outcomes to their present value.  These adjustments reflect that given levels of costs and benefits occurring in the future usually have less value in the present than the same levels of costs and benefits realized in the present.  (NLM/NICHSR 2004)
  2. A process by which benefits or costs realized in future periods are converted to their present value.  Discounting adjusts for the time value of money (i. e., a dollar one possesses now is worth more than a dollar that one will receive in two years, since it could have been invested and earned interest in the intervening period).  Discounting also incorporates assumptions about future inflation effects.  (NYS 1998)
  3. A method for adjusting the value of future costs and benefits to an equivalent value today to account for time preference and opportunity cost, that is, a dollar today is worth more than a dollar a year from now (even if inflation is not considered).  (USDA 2004)

disutility costs
Costs include all the factors leading to the diminished well-being of a patient due to illness or premature death.  Disutility costs of illness typically measure the amount of money (or another measure of well-being) the average patient would be willing to give up to avoid an illness or premature death (such as lower wages received for low-risk jobs).  Disutility may include a wide range of costs, including those for pain and suffering, inconvenience, time lost from regular activities, and productivity losses.  (USDA 2004)

healthy-years equivalents          (ACRONYM: HYE)

The number of years of perfect health that are considered equivalent to (i.e., have the same utility as) the remaining years of life in their respective health states.  (NLM/NICHSR 2004)

hedonic wage studies

Statistical analyses that estimate the effect of intrinsic job characteristics, such as health risks, fringe benefits, or autonomy, on pay.  (USDA 2004)

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human capital approach

A method for estimating the impact of an individual’s illness or premature death on society by measuring the discounted value of his/her productivity loss (labor earnings) due to morbidity or premature mortality.  (USDA 2004)

incidence-based costs

The total lifetime costs of new cases of a disease or injury that occur during a certain period of time.  (USDA 2004)

incremental cost (analysis)

The extra or additional costs imposed as a result of a regulatory policy.   The term incremental is interchangeable with “marginal.”  If compliance requirements have different levels or degrees of achieving certain targets, then incremental costs can be associated with each level of compliance from the current state.  (NYS 1998)

indirect costs

The resources forgone either to participate in an intervention or as the result of a health condition (such as earnings forgone because of loss of time from work).  (USDA 2004)
RELATED TERMS: direct costs

marginal costs

The incremental cost of increasing output of a good or service by a small amount.  (EPA 2003b)

opportunity costs

The monetary value of the resources used in providing a specific set of health-care services, valued in terms of forgone alternative uses.  (USDA 2004)

productivity loss

The monetary value of output that would have been produced in the absence of an illness, disability, injury, morbidity, or premature mortality.  (USDA 2004)
RELATED TERMS: direct costs, indirect costs

quality-adjusted life year          (ACRONYM: QALY)

A unit of health care outcomes that adjusts gains (or losses) in years of life subsequent to a health care intervention by the quality of life during those years.  QALYs can provide a common unit for comparing cost-utility across different interventions and health problems.  Analogous units include disability-adjusted life years (DALYs) and healthy-years equivalents (HYEs).  (NLM/NICHSR 2004). 
RELATED TERMS: quality of life; contrast with disability-adjusted life year

quality of life
  1. Refers to the level of comfort, enjoyment, ability to pursue daily activities.  Often used in discussions of treatment options.  (CancerWEB 2005)

A health effects factor in the EPA/ILSI Framework.  Life expectancy, chronic debilitation, or episodic bouts of disease can all be considered in quality of life.  (ILSI 2000 text)
RELATED TERMS: quality-adjusted life year

willingness to pay          (ACRONYM: WTP)

A measure of the value an individual would place on reducing risk of death or illness.  It is the maximum dollar amount the individual would be willing to give up in a given hypothetical risk-reducing situation.  (USDA 2004)

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