Incidencebased

Incidencebased (often written incidence-based) is an adjective used in economics and health economics to describe analyses, estimates, or methods that center on incidence—the distribution of a burden or effect across agents or over time. In taxation and public policy, incidence-based analysis seeks to identify how a policy's economic burden is shared among buyers, sellers, workers, and owners, rather than merely examining gross policy costs. It relies on concepts such as tax incidence, elasticity of demand and supply, and pass-through to determine who ultimately bears the burden when prices adjust.

In health economics, incidence-based costing refers to approaches that estimate costs from the time of disease onset forward, capturing costs created by new cases (lifetime or long-term costs), as opposed to prevalence-based costing which uses eligible population snapshots. This helps in budgeting and cost-effectiveness analyses for chronic diseases and new interventions.

Methodologically, incidence-based analyses require data on incidence rates, transition probabilities, or price responsiveness, and may employ dynamic modeling to project future costs or burdens. They aim to reflect real-world distributional effects rather than aggregate expenditure.

Limitations include sensitivity to modeling assumptions and data quality, especially regarding elasticities and pass-through proportions, and the potential for results to vary across contexts or time.

See also: incidence, tax incidence, incidence-based costing, cost of illness, pass-through, elasticity.