Benefit‐cost analysis is an economic evaluation methodology which can readily be applied to the analysis of small individual alcoholism programs as well as to large alcoholism service delivery systems. Computational examples are given using information routinely collected at intake and follow‐up by the Oklahoma management information system. Only minor modifications are required for programs using NIAAA's National Alcoholism Program Information System (NAPIS). Suggestions are made for improving the validity of the benefit estimates. The potential information gain through the use of benefit‐cost analysis is demonstrated in worked examples.

Finance plays an important part in determining the range of psychiatric care provided, the use of services, and the number of clients treated.

Cost‐outcome analysis is somewhat like growing old. You know there are many problems associated with it, but it does not seem bad at all when you consider the alternative (Sharp, 1979).