Economic evaluation is now accepted in appraising health care programmes (1-5). Despite this, journal articles leave little explanation for basic principles of economic evaluation. Consequently, much misunderstanding probably remains as to its purpose and ethics. It is the aim of this article to explain the basic principle of economic evaluation and to demonstrate that its application in the clinical setting is entirely ethical; and, indeed, that not to apply it is unethical! This prinicple, along with a case study, are described in the following two sections. In the fourth section of the article, some practical implications of this illustration are drawn before moving on to introduce some important subtleties of economic evaluation-because, as with most activities, there is more to it than meets the eye! All of the methodological issues involved in carrying out and critically appraising an economic evaluation cannot be covered in a article of this nature. For the author’s views on such issues, the reader is referred elsewhere (6).