03 · What You Need to Know
Understanding Participant Costs, Institutional Costs, and Economic Perspective
What Are Participant Costs?
Participant costs are resources or financial burdens incurred by individuals as a consequence of receiving an intervention or participating in activities relevant to the economic evaluation.
They may include transportation, accommodation, connectivity, equipment, childcare, time away from employment, and other expenses.
For example, an online educational intervention may require students to purchase additional mobile data or use personal devices.
Participant costs should be defined in relation to the intervention and comparator. Expenses that participants would incur regardless of the intervention may not represent incremental economic consequences.
Researchers should also distinguish costs of receiving the intervention from burdens associated solely with research participation, such as additional study interviews.
What Are Institutional Costs?
Institutional costs concern resources consumed or expenditure incurred by the organization implementing or delivering the intervention.
Examples include staff time, training, software, equipment, facilities, administration, and technical support.
For a university, institutional costs may include instructor preparation, learning platform subscriptions, and the use of laboratories or classrooms.
For a healthcare organization, relevant costs may include clinical personnel, equipment, supplies, and service delivery.
Researchers should distinguish financial expenditure from the economic value of resources already owned or employed by the institution.
An existing resource may have an opportunity cost even when its use does not generate a new invoice.
Why Does Economic Perspective Matter?
The analytical perspective determines which costs and consequences are included in an economic evaluation.
A narrow institutional perspective may focus on resources consumed by the implementing organization. A payer perspective may focus on expenditures borne by a funding or reimbursement entity.
A societal perspective considers a broader range of relevant economic consequences, subject to the methodological conventions of the evaluation.
Different perspectives can produce different conclusions because costs may be distributed unevenly across stakeholders.
Researchers should establish the perspective prospectively where possible and explain why it is appropriate for the intended decision.
How Do Institutional and Participant Perspectives Differ?
| Cost category |
Institutional perspective |
Participant perspective |
| Instructor or provider time |
May be a direct organizational resource cost |
Usually not a direct participant expense |
| Software licensing |
Included when paid or consumed by the institution |
Included when participants bear relevant charges |
| Transportation |
Included if the institution bears relevant costs |
Included when participants incur travel costs |
| Internet connectivity |
Institutional network and service resources |
Personal connectivity expenses attributable to the intervention |
| Caregiving arrangements |
Usually outside a narrow institutional perspective |
Potentially relevant participant expense |
| Participation time |
May affect organizational operations in particular circumstances |
May represent an opportunity cost |
| Equipment |
Institutional purchase or allocated equipment use |
Personal equipment expenditure or attributable use |
These classifications depend on who actually bears or consumes the resource. Researchers should avoid assuming that a cost category always belongs to one stakeholder.
What Is the Difference Between Out-of-Pocket Costs and Opportunity Costs?
Out-of-pocket costs are direct monetary payments made by participants, such as transportation fares, mobile data purchases, or childcare fees.
Opportunity costs concern the value of resources used in one activity instead of their next-best alternative use.
For example, a participant may spend two hours attending an intervention without making a direct payment. Those hours may nevertheless have an opportunity cost.
However, time should not automatically be valued as lost wages. The appropriate valuation depends on the activity displaced, economic perspective, and methodological framework.
Researchers should distinguish actual earnings losses from modeled time costs and explain the assumptions used.
Can an Intervention Shift Costs From Institutions to Participants?
Yes. Cost shifting occurs when an intervention changes who bears particular expenses without necessarily reducing the total resources consumed.
For example, replacing institution-provided computer laboratory sessions with home-based online activities may reduce institutional facility costs while increasing participant connectivity or equipment requirements.
Similarly, replacing in-person healthcare visits with remote consultations may reduce travel for some patients while requiring others to obtain suitable devices or assistance.
Whether total economic costs increase or decrease depends on the quantities and values of resources affected.
Researchers should not interpret reduced institutional expenditure as proof of reduced total economic burden.
How Can Participant Costs Affect Intervention Access?
Participant costs may influence whether individuals can enroll, engage, or continue receiving an intervention.
For example, additional connectivity expenses may be manageable for some students but prohibitive for others.
Similarly, travel or caregiving costs may create barriers for people with limited resources.
These differences may affect intervention reach and the characteristics of the population receiving it.
Researchers should consider whether internet requirements exclude members of the intended population and whether travel requirements create participation barriers.
Economic evaluation can help make these burdens visible, although identifying them does not automatically establish their causal effects on participation.
Does a Societal Perspective Require Every Possible Cost?
A societal perspective generally seeks to capture relevant economic consequences across stakeholders rather than limiting the analysis to one institution or payer.
However, the precise categories included depend on the evaluation framework, jurisdiction, and decision problem.
Researchers should identify material resource consequences and explain exclusions.
Including every conceivable cost may be impractical and may add little useful information when certain categories are negligible or unrelated to the alternatives.
Nevertheless, excluding substantial participant costs merely because they are difficult to measure may produce an incomplete account of economic consequences.
How Should Researchers Avoid Double Counting Across Perspectives?
Costs should be classified according to the underlying resources consumed and the transactions between stakeholders.
For example, an institution may reimburse a participant's transportation expense. The participant's original payment and the institutional reimbursement should not automatically be added together as two separate societal resource costs.
The reimbursement transfers financial responsibility but does not necessarily represent additional transportation resource consumption.
Researchers should distinguish transfers from resource costs and explain how they are treated under each perspective.
Double counting can also occur when time costs and lost earnings are both valued for the same activity without appropriate justification.
Should Participant Costs Be Measured in Both Intervention and Comparison Groups?
Yes, when comparative economic conclusions depend on differences in participant costs.
For example, an online intervention may increase connectivity expenses while reducing transportation costs relative to face-to-face support.
Measuring only the online intervention's expenses would provide an incomplete comparison.
Researchers should use compatible resource definitions and observation periods across groups.
The relevant quantity is often the incremental participant cost rather than the total expenditure associated with one alternative.
How Can Participant Costs Be Measured?
Potential methods include structured questionnaires, cost diaries, interviews, expense records, and suitable administrative data.
For example, participants may report transportation fares, additional mobile data purchases, or time spent traveling to intervention sessions.
Researchers should specify whether reported expenses are actual payments, estimates, or resources valued through an economic model.
Questionnaires should use clear definitions and recall periods appropriate to the resources being measured.
Where sensitive financial information is collected, privacy and data governance safeguards should be established.
How Should Participant Time Be Measured?
Time-use measurement may include travel, waiting, intervention participation, preparation, and other activities relevant to the economic question.
Researchers should distinguish time required by the intervention from time required only for research assessments.
For example, a student may spend one hour attending an instructional support session and another 30 minutes completing a research questionnaire.
These activities have different functions and may be treated differently when estimating routine intervention costs.
The question of how to measure and value productivity losses and time costs requires particular care because valuation assumptions can materially affect economic conclusions.
Should Participant Costs Be Collected Prospectively?
Prospective collection may be valuable when participant expenses are frequent, variable, or difficult to reconstruct.
For example, repeated transportation expenses or intermittent connectivity purchases may be forgotten during a long retrospective recall period.
However, frequent cost diaries can increase participant burden and potentially affect completion.
Researchers should select a measurement schedule that balances accuracy with practical demands.
They should consider prospective economic evaluation planning when participant costs are important to the intended analysis.
Can Existing Records Replace Participant Cost Questionnaires?
Existing records may capture some expenses, particularly when organizations reimburse travel or provide equipment.
However, institutional records often do not capture privately purchased mobile data, unpaid caregiving arrangements, or personal time costs.
Researchers should evaluate which participant costs are observable through existing sources and which require direct reporting.
Combining sources may improve coverage, provided definitions are consistent and overlapping entries are addressed.
Researchers should avoid assuming that unrecorded costs are zero.
How Can Participant Costs Be Incorporated Into Economic Evaluation?
Participant costs may be included in the primary economic analysis when required by the selected perspective.
Alternatively, they may be reported separately or examined through supplementary analyses when the primary decision perspective is narrower.
For example, a university may conduct an institutional cost-effectiveness analysis while also reporting participant expenses to inform accessibility and equity considerations.
Researchers should specify how costs are combined, which resource categories are included, and whether transfers or overlapping costs have been excluded.
Reporting costs by stakeholder can be informative even when a combined economic estimate is also presented.
How Can Participant Costs Affect Equity?
Costs may impose different burdens on participants with different financial resources, employment arrangements, disabilities, caregiving responsibilities, or geographic circumstances.
For example, the same transportation fare may represent a relatively small expense for one participant and a substantial barrier for another.
Researchers should therefore distinguish monetary cost from affordability.
Averages may conceal important differences in the distribution of costs across population groups.
Where equity is relevant, researchers may examine cost distributions or subgroup patterns, provided the study has suitable data and an appropriate analytical rationale.
Such analyses should avoid unsupported assumptions about individual financial circumstances based solely on demographic categories.
Does Including Participant Costs Change Cost-Effectiveness Conclusions?
It can. An intervention that appears less costly from an institutional perspective may be more expensive when relevant participant costs are included.
Conversely, an intervention requiring greater institutional expenditure may reduce substantial participant travel or time costs.
Whether these differences change the preferred alternative depends on the outcomes, resource valuations, uncertainty, and decision criteria.
Researchers should not assume that including participant costs necessarily favors or disadvantages a particular intervention.
Perspective-specific analyses can clarify how conclusions depend on which costs are included.
What Is the Difference Between Cost-Effectiveness and Affordability?
Cost-effectiveness concerns the relationship between incremental costs and incremental consequences under a defined economic framework.
Affordability concerns whether a stakeholder has sufficient resources to meet the required expenditure.
An intervention may be economically attractive over the long term but require initial expenditure that an institution or participant cannot afford.
Similarly, a program may be affordable but offer poor value relative to alternatives.
Researchers should avoid using these concepts interchangeably.
Should Participant Costs Be Included in Budget Impact Analysis?
Budget impact analysis typically examines the financial consequences of adopting an intervention for a specified budget holder over a defined period.
If the budget holder is a university, participant expenses may fall outside its direct budget impact.
However, those expenses may still matter for adoption, accessibility, and broader economic evaluation.
Researchers should distinguish a budget holder's financial perspective from a broader assessment of economic consequences.
Reporting participant costs separately may prevent a narrow budget analysis from being misinterpreted as a complete account of resource burdens.
How Should Reimbursements and Incentives Be Treated?
Reimbursements and incentives require careful classification because financial transfers are not necessarily equivalent to additional resource consumption.
For example, reimbursing a participant for travel changes who bears the expense but does not create a second journey.
Payments may nevertheless be relevant to an institutional budget analysis because they represent actual expenditure by the institution.
Researchers should specify whether they are measuring financial expenditure, resource costs, or both.
They should also distinguish compensation for research participation from resources required to receive the intervention during routine implementation.
How Should Uncertainty in Participant Costs Be Addressed?
Participant cost estimates may be uncertain because of recall error, incomplete reporting, variation in travel arrangements, or assumptions used to value time.
Researchers should document the relevant data sources and valuation methods.
Sensitivity analyses may examine alternative assumptions about time valuation, travel costs, or other consequential categories.
Missing participant costs should not automatically be treated as zero.
Where data are incomplete, the analysis should acknowledge uncertainty and use appropriate methods under defensible assumptions.
Can Participant Cost Measurement Create Additional Burden?
Yes. Asking participants to report detailed expenses, employment arrangements, or time use may increase the demands of research participation.
Some questions may also be sensitive or difficult to answer accurately.
Researchers should collect information necessary for the economic question and avoid requesting unnecessary personal financial details.
Where possible, brief structured instruments or suitable existing records may reduce reporting demands.
The potential burden of economic data collection should be considered during protocol planning.
How Should Participant and Institutional Costs Be Reported?
Reports should identify the analytical perspective, resource categories, data sources, valuation methods, observation period, and treatment of transfers.
Researchers should report relevant institutional and participant costs separately when doing so clarifies the distribution of economic burdens.
Combined estimates should be constructed using consistent economic principles and without double counting.
Where important participant costs are excluded, the limitation should be acknowledged.
CHEERS 2022 and the Second Panel on Cost-Effectiveness in Health and Medicine provide relevant guidance for reporting and methodological decisions in health economic evaluation. Their applicability to other fields should be considered rather than assumed universal.
Watch Out
Do not interpret lower institutional expenditure as proof that an intervention reduces total economic burden. Costs may be transferred to participants or other stakeholders. Equally, do not add reimbursements, personal expenses, and resource valuations without checking whether the same underlying cost has been counted more than once.
