title: Valuing productivity costs in a changing macroeconomic environment: the estimation of colorectal cancer productivity costs using the friction cost approach.
abstract: BACKGROUND
  The friction cost approach (FCA) has been proposed as an alternative to the human capital approach for productivity cost valuation. However, FCA estimates are context dependent and influenced by extant macroeconomic conditions. We applied the FCA to estimate colorectal cancer labor productivity costs and assessed the impact of a changing macroeconomic environment on these estimates.
  
  
  METHODS
  Data from colorectal cancer survivors (n = 159) derived from a postal survey undertaken in Ireland March 2010 to January 2011 were combined with national wage data, population-level survival data, and occupation-specific friction periods to calculate temporary and permanent disability, and premature mortality costs using the FCA. The effects of changing labor market conditions between 2006 and 2013 on the friction period were modeled in scenario analyses. Costs were valued in 2008 euros.
  
  
  RESULTS
  In the base-case, the total FCA per-person productivity cost for incident colorectal cancer patients of working age at diagnosis was €8543. In scenario 1 (a 2.2 % increase in unemployment), the fall in the friction period caused total productivity costs to decrease by up to 18 % compared to base-case estimates. In scenario 2 (a 9.2 % increase in unemployment), the largest decrease in productivity cost was up to 65 %. Adjusting for the vacancy rate reduced the effect of unemployment on the cost results.
  
  
  CONCLUSIONS
  The friction period used in calculating labor productivity costs greatly affects the derived estimates; this friction period requires reassessment following changes in labor market conditions. The influence of changes in macroeconomic conditions on FCA-derived cost estimates may be substantial.
authors.affiliation: National College of Ireland, Mayor Street, Dublin 1, Ireland. paul.hanly@ncirl.ie.
authors.forename: Paul
authors.initials: P
authors.lastname: Hanly
authors.affiliation: Department of Health Policy and Management, Erasmus University Rotterdam, Rotterdam, The Netherlands.
authors.forename: Marc
authors.initials: M
authors.lastname: Koopmanschap
authors.affiliation: Institute of Health and Society, Newcastle University, Newcastle upon Tyne, UK.
authors.forename: Linda
authors.initials: L
authors.lastname: Sharp
mesh_terms: D015179:Colorectal Neoplasms / Q000191:economics*; D017281:Cost of Illness; D006233:Persons with Disabilities / Q000706:statistics & numerical data; D004526:Efficiency; D005260:Female; D006801:Humans; D007494:Ireland; D008297:Male; D008875:Middle Aged; D017059:Models, Econometric; D061213:Mortality, Premature; D012959:Socioeconomic Factors
keywords: Colorectal cancer; Friction cost approach; Friction period; Productivity costs; Unemployment