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Multiple regression of cost data: use of generalised linear models
Abstract
Objective: Choosing an appropriate method for regression analyses of cost data is problematic because it must focus on population means while taking into account the typically skewed distribution of the data. In this paper we illustrate the use of generalised linear models for regression analysis of cost data. Methods: We consider generalised linear models with either an identity link function (providing additive covariate effects) or log link function (providing multiplicative effects), and with gaussian (normal), overdispersed poisson, gamma, or inverse gaussian distributions. These are applied to estimate the treatment effects in two randomised trials adjusted for baseline covariates. Criteria for choosing an appropriate model are presented. Results: In both examples considered, the gaussian model fits poorly and other distributions are to be preferred. When there are variables of prognostic importance in the model, using different distributions can materially affect the estimates obtained; it may also be possible to discriminate between additive and multiplicative covariate effects. Conclusions: Generalised linear models are attractive for the regression of cost data because they provide parametric methods of analysis where a variety of non-normal distributions can be specified and the way covariates act can be altered. Unlike the use of data transformation in ordinary least-squares regression, generalised linear models make inferences about the mean cost directly.
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“Cost data and QALYs will be analysed using generalised linear models to account for non-normal distributions.83”
From Development, evaluation and implementation of a digital behavioural health treatment for chronic pain: study protocol of the multiphase DAHLIA project (2022) · cites this paper as [83]
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Ling, X.-X., Gabrio, A., & Baio, G. (2025) · PharmacoEconomics · doi:10.1007/s40273-025-01511-1
“Since cost data are often right-skewed and non-negative, the cost component of the Normal model is expanded by assuming a Gamma distribution to reflect these features [23–25].”
Pahmeier, K., Lützel, N., Eschweiler, G. W., Thomas, C., Arnim, C. A. F. V., Rapp, M. A., Dallmeier, D., Denkinger, M. D., Maurer, C., Metz, B., et al. (2025) · Gesundheitsökonomie & Qualitätsmanagement · doi:10.1055/a-2646-9442
van der Vlegel, M., Haagsma, J. A., Geraerds, A. J. L. M., de Munter, L., de Jongh, M. A. C., & Polinder, S. (2020) · Figshare · doi:10.6084/m9.figshare.13126736
Andrén, P., de la Cruz, L. F., Isomura, K., Lenhard, F., Hall, C. L., Davies, E. B., Murphy, T. L., Hollis, C., Sampaio, F., Feldman, I., et al. (2021) · Figshare · doi:10.6084/m9.figshare.16714142
Öksüz, E., Malhan, S., Gonen, M. S., Kutlubay, Z., Keskindemirci, Y., & Tabak, F. (2021) · Figshare · doi:10.6084/m9.figshare.16778535
Andrén, P., de la Cruz, L. F., Isomura, K., Lenhard, F., Hall, C. L., Davies, E. B., Murphy, T. L., Hollis, C., Sampaio, F., Feldman, I., et al. (2021) · Figshare · doi:10.6084/m9.figshare.16714139
Baric, V. B., Yngve, M., Holmefur, M., Feldman, I., Wilder, J., Johansen, K., Klang, N., Lidström, H., & Borgestig, M. (2023) · Figshare · doi:10.6084/m9.figshare.24546991
Kaier, K., Metzner, G., Horstmeier, L. M., Bitzer, E. M., Heimbach, B., Kiekert, J., Voigt-Radloff, S., & Farin-Glattacker, E. (2023) · Figshare · doi:10.6084/m9.figshare.24844622
Andrén, P., de la Cruz, L. F., Isomura, K., Lenhard, F., Hall, C. L., Davies, E. B., Murphy, T. L., Hollis, C., Sampaio, F., Feldman, I., et al. (2021) · Figshare · doi:10.6084/m9.figshare.16714148
Andrén, P., de la Cruz, L. F., Isomura, K., Lenhard, F., Hall, C. L., Davies, E. B., Murphy, T. L., Hollis, C., Sampaio, F., Feldman, I., et al. (2021) · Figshare · doi:10.6084/m9.figshare.16714145
Andrén, P., de la Cruz, L. F., Isomura, K., Lenhard, F., Hall, C. L., Davies, E. B., Murphy, T. L., Hollis, C., Sampaio, F., Feldman, I., et al. (2021) · Figshare · doi:10.6084/m9.figshare.16714136
Shankar, A. V., Spurzem, P., Okibure, A., Wandera, N., Fritz, H., & Mukasa, R. (2026) · SSRN Electronic Journal · doi:10.2139/ssrn.6017640
Rana, R. H., Zwi, K. J., Khan, J. R., Wallace, S., Lingam, R., & Cutler, H. (2026) · PLoS ONE · doi:10.1371/journal.pone.0340780
Pereira, A. C. E. D. S., Gallo, L. G., Oliveira, A. F. D. M., de Oliveira, M. R. F., Martins, E., & Peixoto, H. M. (2026) · The Brazilian Journal of Infectious Diseases · doi:10.1016/j.bjid.2026.105819
Costs and health outcomes of liver transplantation for hepatocellular carcinoma: a scoping review
Palacios-Barahona, U., Rendón, L. G. T., Berruecos, Y. A., Fonseca, A., & Rojas-Gualdrón, D. (2026) · Cost Effectiveness and Resource Allocation · doi:10.1186/s12962-026-00759-4
“…log-rank tests, and Cox regression constitutes the standard for describing and comparing oncological survival, while generalized linear models (GLM) and GEE allow the estimation of covariate impact on costs, appropriately handling the skewed and heteroscedastic distribution of these data [31].”
Moe, I., Durbeej, N., de Oliveira, C., & Sampaio, F. (2026) · Child and Adolescent Psychiatry and Mental Health · doi:10.1186/s13034-026-01110-8
“[43].”
Borst, J. M., Highet, A., Rode, J. B., Manda, S. I., Rahmani, R. A., Raval, M. V., & Lautz, T. B. (2026) · Journal of Pediatric Surgery · doi:10.1016/j.jpedsurg.2026.163296
Metadata
- Authors
- Barber, J., & Thompson, S.
- Affiliations
- University College London (GB)
- MRC Biostatistics Unit (GB)
- Venue
- Journal of Health Services Research & Policy
- Publisher
- SAGE Publications
- Published
- 2004-10-02
- Volume
- 9
- Issue
- 4
- Pages
- 197-204
- ISSN
- 1355-8196 (ISSN-L)
- 1758-1060
- OpenAlex
- W1996146145
- Cited by
- 404
- References
- 20
- Citations by year
- 2026: 11 · 2025: 11 · 2024: 17 · 2023: 18 · 2022: 27 · 2021: 29 · 2020: 32 · 2019: 29 · 2018: 32 · 2017: 28 · 2016: 28 · 2015: 23 · 2014: 22 · 2013: 17 · 2012: 20
- FWCI
- 7.09
- Type
- journal article
- Language
- en
- Open access
- closed
- Locations
- Journal of Health Services Research & Policy (publishedVersion)
- PubMed (publishedVersion)
- UCL Discovery (University College London) (submittedVersion)
- Topics
- Physical Sciences › Mathematics › Statistics and Probability › Statistical Methods and Bayesian Inference
- Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Health Systems, Economic Evaluations, Quality of Life
- Physical Sciences › Mathematics › Statistics and Probability › Statistical Methods in Clinical Trials
- Keywords
- cost data, generalized linear models, skewed distributions, gamma distribution, inverse Gaussian distribution, log link function, treatment effects, baseline covariate adjustment, model selection criteria
- MeSH terms
- Costs and Cost Analysis, United Kingdom, Health Services Research, Normal Distribution, Linear Models
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