The aim of this book is to explain how the theory and practice of cost–benefit analysis apply in the context of making health care expenditure decisions. We start by explaining why evaluation is necessary, defining an evaluation and identifying the main ingredients. Then we show how the ingredients are put together to form four alternative types of economic evaluation. Cost–benefit analysis will be demonstrated to be the primary evaluation technique, so the basic concepts behind this approach will be outlined. We proceed to supply applications (case studies) which illustrate some of the main evaluation principles and provide an overview of the health evaluation field. We close with sections that include problems, a summary and a look forward that provides a guide to the book. All of the themes introduced in this first chapter will be developed in greater depth in later chapters of the book.