Module 1, Introduction to Costing, will discuss why and how costing can be used for family planning programs, as well as cover some common terminology used in costing and economic evaluation.

What is "costing"?

"Costing" is the process by which the cost of a specific intervention or service is estimated within a particular context (location, time, population, etc.). "Cost" is a general term that refers to the value of resources/inputs used to produce a good or service and may include monetary and/or non-monetary values.

Some of the different types of costs are described below:

Total vs Unit cost

• Total cost is the sum of the costs of all the inputs required to produce an output or service (see diagram).
• Site-level costs occur at the point of service delivery.
• Above site level costs occur above the point of service delivery.
• Unit (or Average) cost is the total cost divided by a given level of unit of intervention, output, or service.

Fixed vs Variable costs

• Fixed costs do not vary by output level.
• Variable costs do vary by output level.

Recurrent vs. Capital costs

• Capital costs are costs for inputs that last longer than one year.
• Recurrent costs are costs for inputs that are used up within one year.

How is costing used?

Costing is a tool used by health economists to evaluate programs. Health economics is a branch of economics concerned with issues related to efficiency, effectiveness, values, and behavior in the production and consumption of health and health care.

Estimating costs is an important aspect of informing decision making when implementing global health interventions. Cost data are used to inform a variety of decisions, for example:

• To set priorities in a program
• To inform initial budgeting and planning processes
• To improve accountability and oversight

Cost data is used in addition to budget and expenditure data to understand the full financial picture. Each type of data captures a different aspect of the financial picture:

Remember to review the PowerPoint presentation before moving on to the quiz and any exercises if available. If you are interested in learning more about a specific topic, click on any of the additional items in the "Resources" box below to be linked to the relevant material.

Move on to Module 2 to learn about different costing approaches.

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