The Dictionary of Health Economics, Second Edition
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The Dictionary of Health Economics, Second Edition

Anthony J. Culyer

This second edition of Culyer’s authoritative Dictionary of Health Economics brings the material up to date and adds large amounts of new information. Some definitions have been revised. There are over 700 new entries. The Dictionary now also contains extensive references to the literature to identify original source material or to provide illustrations of the headword in use.
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Preface to the First Edition

Anthony J. Culyer

Knowledge is of two kinds. We know a subject ourselves, or we know where we can find information on it.

(Samuel Johnson, quoted in Boswell’s Life of Johnson)

This is a book serving the second of these two kinds of knowledge; a book that I have intended that the reader should be able to dip into from time to time. It may also serve that other thing with which knowledge is so often mistaken: understanding. If one’s appetite is whetted, as I hope may occasionally be the case, there are loads of decent texts that provide solid main courses and desserts. The Dictionary is not intended to compete with them. My main wish is that it will be of use to the reader in a hurry (whether a beginning economist or someone who needs to understand what economists go on about), who wants a reminder about a topic or who wants a quick and relatively painless introduction to it. It would be great if, to borrow from Sir Topham Hat (the Fat Controller in Thomas the Tank Engine), the Dictionary were to be a ‘really useful engine’.

Health economists, to a greater extent than most economists, have engaged in close collaborations with specialists in other fields (not only other social sciences) and with policy-makers, especially in the area of health technology assessment. I have intended, therefore, that the book may be useful to these ‘others’. Multidisciplinarity and multiprofessionality also have a consequence for the inclusion criteria used: I have included many more definitions, particularly in statistics, epidemiology and medicine, than would otherwise have been the case, which may be useful to health economists without causing outrage to the relevant ‘others’. These are provided, however, strictly on the bikini principle: I have restricted myself to covering the bare essentials of definition save for cases where I have judged the other discipline to have become so intertwined with health economics that it warrants more extended treatment – even explanation. Again, this is not a textbook. I have provided definitions and occasional interpretational help on non-economic terms on the grounds that, in multidisciplinary collaborations (whether trans-disciplinary, cross-disciplinary, interdisciplinary – terms the reader will not find in the Dictionary!) between researchers/teachers who still have a primary single academic disciplinary base, it is a good thing for each side of the collaboration to have some (even if incomplete) understanding of the concepts and methods of the others. We economists certainly need such help and p. xivI have tried to provide it without, I trust, doing too much violence to the meanings of other disciplines’ specialized jargon.

Nor is this a general economics dictionary, so I have not included economic terminology that is infrequently used by health economists. There is, for example, hardly any macroeconomics here. The verbal boundaries of ‘health economics’ are one of the four matters I have wondered more about than about any other inclusion/exclusion criterion. Should it turn out that I have been too stringent in excluding terms, or too lax in including them, I trust my users will let me know.

The second ‘boundary’ issue about which I have worried concerns the extent to which the Dictionary ought to include the names and biographies of significant health economists. I have included people’s names only when they have become attached to a headword or phrase requiring an entry (for example, ‘Pareto-optimality’, ‘Altman’s nomogram’) or where their name has a common adjectival form, as in ‘Rawlsian’ (none of these three is, of course, a health economist). Only in such cases have I provided some bibliographical information (and occasionally biographical information as well). This is a tough rule and it has produced some odd outcomes. Thus, Kenneth Arrow is in (but not on account of his scientific contribution to health economics) and Alan Williams is in (but on account of his league table and ‘plumbing diagram’ rather than QALYs or ‘fair innings’, or. . .). Without explicit mention are Angus Deaton, Mike Drummond, Bob Evans, Martin Feldstein, Richard Frank, Victor Fuchs, Mike Grossman, Bengt Jonsson, Emmett Keeler, Herb Klarman, the two Laves, Harold Luft, Will Manning, Tom McGuire, Gavin Mooney, Joe Newhouse, Mark Pauly, Charles Phelps, Frans Rutten, Frank Sloan, Greg Stoddart, George Torrance, Burt Weisbrod and lots of (mostly younger) others who have played key roles in shaping the discipline. They are there, of course, peering through the undergrowth of the entries but anonymously, just like the ‘basic science’ giants, many of whom are fortunately still actively with us, on whose intellectual shoulders we all stand: Armen Alchian, Gary Becker, James Buchanan, Milton Friedman, Peter Hammond, John Harsanyi, Werner Hildenbrand, Daniel Kahneman, Ian Little, Paul Samuelson, Joseph Stiglitz, Reinhard Selten, Amartya Sen, Vernon Smith and Vivian Walsh. To venture into list-making exemplifies my problem – where does one stop, how far does one stray into psychology and other related disciplines, and how does one avoid giving offence? So I stopped barely before beginning: the case for inclusion is eponymy. The only exception I have allowed is that of Lionel Robbins, mainly on account of his famous definition of ‘economics’, because he was not a health economist and because he is dead.

A third ‘boundary’ issue relates to the inclusion or exclusion of p. xvorganizations. I have included as many official organizations that are substantial users or commissioners of health economics as I can identify and I have also included those health economists’ professional organizations of which I know. I have not included any of the many research groups in universities and elsewhere nor have I included the names of government departments and ministries, many of which now have teams of health economists. Where possible, I have included web addresses.

The fourth boundary issue related to references: what to include and what not. I suspect that I have been too strict here in citing only works in which the origin of a headword or phrase is to be found. Providing references on all topics of substance, whether in health economics or one of the ‘others’, would have been a major additional effort and one whose fruits, moreover, would be doomed to become obsolete relatively early. However, this is a question that might be answered differently should the opportunity arise later.

I have not included obsolete terms, unless I have judged them to have continuing value (as, for example, with ‘value in use’) but I have left ones in that seem obsolescent until such time as their destiny has become clear.

I have gone well beyond a definition in many cases, especially when I have judged a topic to be a critical element of health economics, one about which there are widespread misconceptions that need putting right, or one where it seemed important to give some insight into the way an idea is used, why it is important or why it is controversial. The aim of these mini-lectures is to help readers to get on track. They are not, however, accompanied by further reading: again, this Dictionary is not a textbook and ought not to be treated as though it were. Driving a locomotive demands more than the knowledge that it is merely on the right track.

I have not hesitated to record opinions, sometimes sharp ones, some tongue-in-cheek, where it seemed appropriate. Needless to say, the opinions are mine and there is no implication that they are widely shared amongst health economists. I hope both the explicit opinions and any left implicit will lighten the enquirer’s search, even if it does not enlighten it. A dictionary surely need not be entirely po-faced.

I have tried to ensure that the language of the Dictionary is inclusive. I use ‘they’ ‘them’ and ‘their’ instead of the tediously repetitive mantra of ‘he or she’, ‘him or her’ and ‘his or hers’ (or ‘she or he’, ‘her or him’ and ‘hers or his’).

Samuel Johnson famously defined a lexicographer as ‘A writer of dictionaries; a harmless drudge that busies himself in tracing the original, and detailing the signification of words’. The really significant word in this definition is ‘harmless’ and I am not sure of his truthfulness in asserting it. Practical lexicographers have the power to confuse, mislead and infuriate, p. xviall of which seem to be pretty harmful things to be doing. I have tried to keep my harm as small as possible. At any rate, my risk of doing harm is further reduced by my eschewing any systematic attempts at etymology or word history.

The Dictionary doubtless contains mistakes. I apologize for them now. I would be grateful to hear from readers who want to put me right. My explanation for error is again Johnson’s who, according to Boswell, when asked how he came to give a mistaken definition of ‘pastern’, replied: ‘Ignorance, Madam, pure ignorance.’ I hope nonetheless that I have hidden most of mine.

My particular hope is that, whatever the imperfections of this Dictionary, it will be judged to be of sufficient value for enquirers to want to invest their time in telling me how a recension might make it better. My e-mail addresses are: and