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Appendix A

Theoretical Issues Relevant to Estimating Costs of FAS

Theoretical Issue Brief Description

How are "costs" defined? Are the costs public, private, or both?

Typically, economists' definition of cost is based on the concept of the alternative use of a scarce resource, or opportunity cost. In addition, both tangible and intangible costs (e.g., pain and suffering) can be estimated, although the latter is rarely valued in health studies. Further, public and private costs can be estimated; social costs include both.

Should one use incidence-based or prevalence-based estimates of costs?

An incidence-based approach uses an estimate of expected lifetime costs for new cases to estimate present and future costs. A prevalence-based approach generally measures the current year costs based on new cases and previously existing cases.

Are productivity losses included?

Some cost estimates include an amount for productivity losses associated with an illness.

Are administrative, prevention, research, and education costs included?

While such costs are associated with programs that serve individuals with FASD, they are often viewed as policy costs rather than direct costs. However, policy costs are generally included in the general cost-of-illness framework.

Are juvenile/criminal and law enforcement costs included?

While a link between FASD and involvement with the juvenile/criminal justice system may exist, the causal connection has not yet been rigorously studied.

Should nonworkforce morbidity and mortality costs be included? How?

It is possible to estimate the cost of unpaid work (e.g., child care) and the cost of persons to provide replacement services. However, such studies have not been conducted to date.

What value is placed on life itself?

While it is troublesome to many to place a dollar value on life (or quality years of life), for some cost estimation studies, the absence of any value on life or quality years is not reasonable either. Economists have used human capital (value of lost productivity) and willingness to pay to address this issue.

How Well-Documented FAS Cost Estimates Address Theoretical Issues

Theoretical Issue Abel and Sokol Harwood and Napolitano Rice, et al. Harwood, et al.

Are the costs public, private, or both?

Both; treatment costs can be public or private.

Both; treatment costs can be public or private.

Both; treatment costs can be public or private.

Both; treatment costs can be public or private.

Are cost estimates based on incidence or prevalence?

Prevalence

Prevalence

Prevalence

Prevalence

Are productivity losses included?

No

Yes

No

Yes

Are administrative, prevention, research, and education costs included?

No

No

Only research

Not broken out for FAS, but included in the total cost of alcohol disorders

Are juvenile/criminal and law enforcement costs included?

No

No

No

No

Are nonworkforce morbidity and mortality costs included?

No

No

No

No

Is a value placed on life itself?

No

Addressed via lost productivity

No

Addressed via lost productivity