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Measuring how much value interventions create can help us to evaluate their cost-effectiveness.

Ideally, we would measure the things we value directly. Unfortunately, we often value things that are difficult to measure, so that we must instead measure other variables that are closely related to what we do value. For instance, we may try to measure the impact of an intervention on someone’s health, because improving health tends to improve well-being. Although we ultimately care about well-being rather than health, the latter is a relatively good measure of the former, which is hard to measure directly.

It can also be worthwhile to assess the value of things that matter only instrumentally, such as the value of information, and to consider how value may change over time, as represented by discount rates.

Further reading

Grace, Katja. 2015. Apples and oranges? Some initial thoughts on comparing diverse benefits.
A discussion of various means of measurement and comparison.

Wikipedia. 2016. Happiness economics.
A discussion of the measurement of happiness.