Economic principles and perspective in policymaking process

Should public health professionals promote policies that are the most effective or those that
are the best value for the dollar? Describe how economic principles and perspective are
used in the policymaking process, citing a specific example from the research literature.

According to Davis & Serrano (2017), the cost-benefit-analysis facilitates the determination of
monetary outcomes that guide the efficient allocation of resources in areas where claims are
made on the gains provided to the community in general hence the perspective is globalized as
opposed to individualized. It thus facilitates the identification of suitable ways through which
various outcomes can be achieved. On the other hand, cost-effectiveness-analysis is expressed in
physical units that are essential in areas such as education, health, or safety against accidents as
they are easier to specify the benefits obtained (Davis & Serrano, 2017). As such, cost-
effectiveness-analysis endeavors to determine ways to redirect resources to achieve more.
The application of the cost-best analysis occurs in situations in which the indicators of
market prices do not reflect the opportunity cost of the resources involved. More precisely, cost-
benefit analysis facilitates the valuation of intermediate goods that include savings in travel time
from transport projects. It further leads to the assessment of externalities or unidentified spillover
effects that emanate from pollution or vaccination against infectious disorders (Davis & Serrano,
2017). These are coupled with the valuation of goods affected by taxes and subsidies, those
subject to restrictions on exportation or importation, and labor inputs that result from
unemployment. Additionally, cost-benefit analysis is used in the computation of present values
based on the budget and constraints. The limitations associated with cost-benefit analysis include
weaknesses in the design based on estimates of what would have happened in the absence of the

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project. These are coupled with the treatment of intangibles, equity concerns, and obscurity.
Conversely, cost-effectiveness analysis plays an integral role in the comparison of costs
associated with natural health outcome units that include the number of life-years saved or cases
averted (Davis & Serrano, 2017). It is thus appropriate in informing the decision as it maintains
health outcomes in their natural units as opposed to monetizing the effects.
In public health policy development, the cost-benefits analysis approach is used in the
measurement of the actual expenditures related to the core research project. It further facilitates
the development of each institution and the program that should be used in economic evidence
during the assessment of the research efficiency, effectiveness, sustainability, and scalability.
Additionally, the cost-benefit analysis provides the baseline data that facilitates alternative
economic evaluation studies (Rabarison, Bish, Massoudi, & Giles, 2015). For instance, the
application of the cost-benefit analysis program at the Congress level would facilitate the
comparison of different strategies that yield distinct outcomes that include the welfare of the
people or investment in health versus those in other programs such as nutrition or physical
fitness. On the other hand, Rabarison, Bish, Massoudi, & Giles (2015) indicate that, at a cervical
cancer intervention program, the application of the cost-benefit approach would involve
comparing the various interventions that yield the same effects.

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Davis, G. C., & Serrano, E. L. (2017). Cost-Effectiveness and Cost–Benefit Analysis. Oxford
Scholarship Online. doi:10.1093/oso/9780199379118.003.0016
Rabarison, K. M., Bish, C. L., Massoudi, M. S., & Giles, W. H. (2015). Economic Evaluation
Enhances Public Health Decision Making. Frontiers in Public Health, 3.