Price Elasticity of Demand
A measure of how responsive quantity demanded is to a price change, calculated as percentage change in quantity over percentage change in price.
Encyclopaedia
Explore comprehensive, evidence-informed explanations of key health economics concepts, including their development, application and relationships to other concepts. Published entries are validated through human expert review.
Price Elasticity of Healthcare
An empirical estimate of how sensitive healthcare use is to changes in out-of-pocket price, most famously quantified by a large randomised experiment.
Principal Agent Model
A formal framework analysing situations where a principal delegates decisions to an agent whose interests may not fully align with their own.
Principal Component
In principal component analysis, a derived variable combining original observed variables to capture the maximum possible variance, uncorrelated with prior components.
Principal-Agent Problem
The difficulty arising when an agent's actions cannot be fully observed by the principal, creating an incentive for the agent to serve their own interest.
Principal-Agent Problem in Healthcare
The specific version of the principal-agent problem in the physician-patient relationship, where clinical expertise gaps create both helpful guidance and risk of distorted recommendations.
Prior Distribution
In Bayesian statistics, the probability distribution representing existing beliefs about a parameter before observing new data.
Prior Probability
The probability assigned to a hypothesis before accounting for new evidence, representing existing belief later updated through Bayesian analysis.
Probabilistic Analysis
An analysis in which uncertain inputs are represented by probability distributions rather than fixed values, and the model runs repeatedly with sampled values.
Probabilistic Sensitivity Analysis
A method characterising overall model uncertainty by assigning probability distributions to inputs and running the model repeatedly with randomly sampled values.
Probability
A numerical measure, ranging from zero to one, expressing the likelihood that a specific event will occur.
Probability of Cost-Effectiveness
The likelihood, given uncertainty in the cost and effect estimates, that an intervention's ICER falls below a specified willingness-to-pay threshold.
Probability-to-Rate Conversion
The mathematical transformation converting a probability of an event over a discrete time interval into its corresponding continuous-time hazard rate.
Producer Surplus
The difference between the price a producer receives and the minimum they would have accepted, the net benefit they gain from a transaction.
Producer Theory
The branch of microeconomic theory analysing how firms choose inputs and output levels to maximise profit given their costs and market conditions.
Product Limit Estimator
The formal statistical name for the Kaplan-Meier estimator, reflecting its calculation as a running product of conditional survival probabilities.
Production Possibility Frontier
A graph showing the maximum combinations of two goods or outcomes producible given a fixed set of resources and existing technology.
Productive Efficiency
A condition in which a given output level is produced using the minimum possible inputs, synonymous with technical efficiency.
Programme Budget
A budgeting approach that organises spending around specific programmes or services rather than departmental line items.
Progression-Free Survival
A time-to-event measure defined as the time from treatment start until either disease progression or death from any cause, whichever occurs first.