Disclaimer: This is my personal opinion and does not reflect the opinions of Giving What We Can or any particular other organisation. This is a draft.
Many people have heard that it costs about US$ 3,340 to save a life by distributing insecticide treated bed nets and ~$100 to enable a life of health i.e. $100 per Disability-adjusted life year (DALY) averted. Where do these numbers come from? How are they calculated? And how do they relate to each other?
These numbers are based on a calculation from Givewell’s review of the Against Malaria Foundation[1]. Givewell caveats that these estimates should be used with caution due to significant uncertainty around them, but that it is useful for comparative purposes and to “think through as many of the relevant issues as possible”[2].
Givewell’s spreadsheet[3] shows that they take the average overall costs for bednet distributions by AMF and divide them by the expected lives saved / death averted “per protected child under 5 – adjusted for today’s lower rates of child mortality and insecticide resistance”. The later estimate also takes into account factors such as wastage, years of protection per person per net, and pre-existing net ownership. This calculation gives us the $3,340 per life saved / deaths averted figure.
But where does the $100 per DALY averted figure come from? And why does it cost $3,340 to avert a death of an 5-year-old child, which has a life expectancy of ~80 years, but ~$100 to enable a year of health life? Shouldn’t it be ~$40 per DALY averted (i.e. $3340 / 80 years)? The answer is that the $100 figure per DALY averted is time discounted at 3%. If one were to not time discount then it would indeed only be ~$40 per DALY averted. But if one time discounts ~80 DALYs at 3%, then they become ~30 DALYs (see [4] for the conversion table used and [5] to read more about time discounting). You might have noticed that 30*100 is $3000 and not $3,340. This is because the average DALY averted figure used is actually ~$112.5 (in Malawi it’s $98 per DALY averted, whereas in the DRC it’s $125 per DALY averted). 112.5*30 = 3375, which is pretty much the stated $3,340, with the discrepancy being due to rounding errors.
Incidentally, these figures are similar to the one published in a recent Lancet article[6], which estimates that, in low-income countries, to save a child’s life, the cost is US$4205.
Long-lasting insecticide treated nets: $3,340 per life saved, $100 per DALY averted. How is this calculated?
Disclaimer: This is my personal opinion and does not reflect the opinions of Giving What We Can or any particular other organisation. This is a draft.
Many people have heard that it costs about US$ 3,340 to save a life by distributing insecticide treated bed nets and ~$100 to enable a life of health i.e. $100 per Disability-adjusted life year (DALY) averted. Where do these numbers come from? How are they calculated? And how do they relate to each other?
These numbers are based on a calculation from Givewell’s review of the Against Malaria Foundation[1]. Givewell caveats that these estimates should be used with caution due to significant uncertainty around them, but that it is useful for comparative purposes and to “think through as many of the relevant issues as possible”[2].
Givewell’s spreadsheet[3] shows that they take the average overall costs for bednet distributions by AMF and divide them by the expected lives saved / death averted “per protected child under 5 – adjusted for today’s lower rates of child mortality and insecticide resistance”. The later estimate also takes into account factors such as wastage, years of protection per person per net, and pre-existing net ownership. This calculation gives us the $3,340 per life saved / deaths averted figure.
But where does the $100 per DALY averted figure come from? And why does it cost $3,340 to avert a death of an 5-year-old child, which has a life expectancy of ~80 years, but ~$100 to enable a year of health life? Shouldn’t it be ~$40 per DALY averted (i.e. $3340 / 80 years)? The answer is that the $100 figure per DALY averted is time discounted at 3%. If one were to not time discount then it would indeed only be ~$40 per DALY averted. But if one time discounts ~80 DALYs at 3%, then they become ~30 DALYs (see [4] for the conversion table used and [5] to read more about time discounting). You might have noticed that 30*100 is $3000 and not $3,340. This is because the average DALY averted figure used is actually ~$112.5 (in Malawi it’s $98 per DALY averted, whereas in the DRC it’s $125 per DALY averted). 112.5*30 = 3375, which is pretty much the stated $3,340, with the discrepancy being due to rounding errors.
Incidentally, these figures are similar to the one published in a recent Lancet article[6], which estimates that, in low-income countries, to save a child’s life, the cost is US$4205.
[1] “Against Malaria Foundation (AMF) | GiveWell.” 2010. 13 Jul. 2015 <http://www.givewell.org/international/top-charities/AMF#Costperlifesaved>
[2] “Against Malaria Foundation (AMF) | GiveWell.” 2010. 13 Jul. 2015 <http://www.givewell.org/international/top-charities/AMF#Costperlifesaved>
[3] http://www.givewell.org/international/top-charities/AMF#footnote81_jlayyrw
[4] See Lopez et al. 2006, Table 5.1, Pg 402 http://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2006/06/06/000160016_20060606163437/Rendered/PDF/364010PAPER0Gl101OFFICIAL0USE0ONLY1.pdf
[5] Ord, Toby, and Robert Wiblin. “Should we discount future health benefits when considering cost-effectiveness?.”
[6] “Keeping score: fostering accountability for children’s lives …” 2015. 13 Jul. 2015 <http://www.thelancet.com/journals/lancet/article/PIIS0140-6736(15)61171-0/fulltext?rss=yes>