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The Adjustment of Cost Measurement to Account for Learning
Author(s) -
Langkilde Lars K.,
Søgaard Jes
Publication year - 1997
Publication title -
health economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.55
H-Index - 109
eISSN - 1099-1050
pISSN - 1057-9230
DOI - 10.1002/(sici)1099-1050(199701)6:1<83::aid-hec248>3.0.co;2-u
Subject(s) - unit cost , relevant cost , computer science , cost estimate , learning effect , unit (ring theory) , value (mathematics) , total cost , economics , machine learning , mathematics , microeconomics , mathematics education , management
This note discusses the adjustment of cost measurement to account for learning. By learning is meant improvements in productive efficiency resulting from use of a (health) technology in routine practice. A recently proposed method is shown to be potentially misleading. Alternatively, it is suggested that the total cost is decomposed in treatment cost and learning cost. Furthermore, if there is uncertainty about the long‐run unit cost, learning will reveal the true cost. A method to adjust the learning cost for the value of this information is illustrated. © 1997 by John Wiley & Sons, Ltd.