TY - JOUR
T1 - Rates and probabilities in economic modelling
T2 - Transformation, translation and appropriate application
AU - Fleurence, Rachael L.
AU - Hollenbeak, Christopher S.
PY - 2007
Y1 - 2007
N2 - Economic modelling is increasingly being used to evaluate the cost effectiveness of health technologies. One of the requirements for good practice in modelling is appropriate application of rates and probabilities. In spite of previous descriptions of appropriate use of rates and probabilities, confusions persist beyond a simple understanding of their definitions. The objective of this article is to provide a concise guide to understanding the issues surrounding the use of rates and probabilities reported in the literature in economic models, and an understanding of when and how to transform them appropriately. The article begins by defining rates and probabilities and shows the essential difference between the two measures. Appropriate conversions between rates and probabilities are discussed, and simple examples are provided to illustrate the techniques and pitfalls. How the transformed rates and probabilities may be used in economic models is then described and some recommendations are suggested.
AB - Economic modelling is increasingly being used to evaluate the cost effectiveness of health technologies. One of the requirements for good practice in modelling is appropriate application of rates and probabilities. In spite of previous descriptions of appropriate use of rates and probabilities, confusions persist beyond a simple understanding of their definitions. The objective of this article is to provide a concise guide to understanding the issues surrounding the use of rates and probabilities reported in the literature in economic models, and an understanding of when and how to transform them appropriately. The article begins by defining rates and probabilities and shows the essential difference between the two measures. Appropriate conversions between rates and probabilities are discussed, and simple examples are provided to illustrate the techniques and pitfalls. How the transformed rates and probabilities may be used in economic models is then described and some recommendations are suggested.
UR - http://www.scopus.com/inward/record.url?scp=33846118263&partnerID=8YFLogxK
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U2 - 10.2165/00019053-200725010-00002
DO - 10.2165/00019053-200725010-00002
M3 - Review article
C2 - 17192114
AN - SCOPUS:33846118263
SN - 1170-7690
VL - 25
SP - 3
EP - 6
JO - PharmacoEconomics
JF - PharmacoEconomics
IS - 1
ER -