Cost-Utility Analysis (CUA)
Cost-Utility Analysis (CUA) is a method for evaluating and comparing programs with non-monetary goals by measuring individual preferences and calculating the cost to achieve a unit of utility. It helps in making informed decisions when monetizing outcomes is not feasible or when considering stakeholder values is crucial.
Use CUA when you need to compare programs with similar goals but different outcomes, especially when those outcomes are difficult to quantify in monetary terms. It's particularly useful when stakeholder preferences and values need to be incorporated into the decision-making process.
Solves: Difficulty in comparing programs with diverse outcomes; lack of consideration for individual preferences in decision-making.
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Step 1: Determine the attributes of utility/value that are relevant to the program's goals. (30 minutes)
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Step 2: Assess the utility of each attribute using methods like proportional scoring or direct methods. (60 minutes)
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Step 3: Assess the importance weights of each attribute to overall utility, using direct or variable probability methods. (30 minutes)
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Step 4: Gather comprehensive cost data for each program alternative, including all resources used. (Ongoing)
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Step 5: Combine costs and utility to calculate the cost-utility ratio for each alternative. (30 minutes)
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Step 6: Conduct a sensitivity analysis to account for uncertainty in the parameters. (30 minutes)
- Clearly define the scope and boundaries of the analysis to avoid scope creep.
- Ensure that stakeholders understand the methods used to assess utility and importance weights.
- Use different methods for assessing utility and importance weights.
- Conduct a more detailed sensitivity analysis to explore the impact of different assumptions.