Economic appraisal of health care projects is not new. Indeed the instigator of this approach, Sir William Petty, the so-called father of political economy, was an Oxford medical don in the late 17th century. To an economist the aim of studies evaluating expenditure on health care is to throw light on the use of resources and to provide information which will enable us to improve our decision taking. The studies can provide guidance about (a) the allocation of resources to the health sector, and (b) the allocation of resources within the health sector. In this paper the various studies which have been made are considered and the problems and limitations of the techniques used and the usefulness of the studies to planners of services are discussed.