Using cost effectiveness analysis; a beginners guide

Objective ‐ This report seeks to describe the key elements of cost effectiveness analysis (CEA) and to demonstrate how such analysis may be used in the library environment.

Methods ‐ The paper uses a step‐by‐step approach to walk the non‐economist reader through the basics of conducting a cost effectiveness study. It provides an outline of the key elements of CEA using examples from the library sector, and it presents a case study of a CEA in a hospital library. The case study compares two library services, mediated searching and information skills training, to illustrate the application of CEA and to highlight some of its limitations.

Results ‐ CEA is a comparative analysis tool. Its key elements include a study question regarding a particular process or procedure that identifies both costs and effectiveness; a justification of the study’s perspective; evidence of effectiveness; comprehensive identification of all relevant costs, and appropriate measurement of costs and effectiveness.

Conclusions ‐ CEA enables comparison of services or interventions regarding particular processes or procedures in terms of their costs, and it measures their effectiveness. The results can be used to aid decision‐making about service provision.