This article investigates the way in which the presence of censored co
st data in clinical trials should dictate the inferential tests adopte
d when comparing treatment and nontreatment groups for the purpose of
economic evaluation. The authors argue that the techniques of survival
analysis are appropriate where censoring is present, and that bias wi
ll be imparted if cruder methods are used to analyze cost data, even i
f that data is drawn from a relevant population. The first section of
the article discusses the problem of censoring and survival analysis,
while the second examines three methods of dealing with censored cost
data and possible biases resulting from them. The third section presen
ts results from actual trial data using the three methods described in
the preceding section. Conclusions are presented in section four, whe
re it is argued that these methodological issues are likely to become
more important as economists are called upon to evaluate the treatment
of chronic conditions using data from clinical trials with finite end
points.