Integrated Equity-Weighted Causal Benefit–Cost Analysis: A Conceptual Framework for Equity-Conscious Health Policy Evaluation

Abstract

Traditional benefit–cost analysis (BCA) summarizes the average net social benefit of a policy but often obscures how benefits and costs are distributed across groups. This is a major limitation in health policy settings, where decision-makers must assess both efficiency and equity. This article develops an integrated equity-weighted causal benefit–cost analysis (IEW-BCA) framework for equity-conscious policy evaluation. The framework links subgroup-specific causal effect estimates, explicit valuation functions, and equity weights within a single evaluation pipeline suitable for applied policy appraisal. It makes three contributions: first, it provides an implementable structure for combining causal heterogeneity with welfare-consistent valuation; second, it introduces a compound equity vector and associated weighting functions that extend income-based schemes and can be interpreted, under standard conditions, as a first-order approximation to a broad class of social welfare functions; and third, it develops equity-oriented summary tools, including a causal equity gradient and related dominance criteria, to improve transparency about distributional impacts. A stylized example illustrates implementation, and the discussion outlines implications for uncertainty, sensitivity analysis, and potential application in health economics, public health policy, and regulatory evaluation.