AXIOMATIC FOUNDATIONS FOR COST-EFFECTIVENESS ANALYSIS

We show that individual utilities can be measured in units of healthy life years. Social preferences over these life metric utilities are assumed to satisfy the Pareto principle, anonymity, and invariance to a change in origin. These axioms generate a utilitarian social welfare function implying the use of cost‐effectiveness analysis in ordering health projects, based on maximizing the healthy years equivalents gained from a fixed health budget....