Health economics deals with how resources are used for health production and how they should be most efficiently allocated to maximise health outcomes. Many treatment alternatives for depression are currently available, but there is insufficient knowledge of their consequences on costs and their value of actual and potential health gains. The aims of the present thesis were to study aspects of the health economics of depression that are important for priority settings: the burden of depression to society, cost and health-related quality of life associated with patients treated for depression and modelling the cost-effectiveness of treatments for depression. A new approach was developed to assess the societal cost of depression in Europe. The results showed that more than 21 million Europeans are suffering from depression and that depression cost European society more than SEK 1000 billion per year, two-thirds of which are found outside the healthcare system. The cost of depression equals SEK 2 300 per inhabitant in Europe corresponding to 1% of the European national incomes. Naturalistic studies of cost and outcome in clinical practice are rare. The study "Health Economics of Depression In Sweden" (HEADIS) is one of the first naturalistic observational studies conducted in Sweden, collecting information on the cost and quality of life related to patients treated for depression in primary care. The cost for a patient treated for a depressive episode was estimated at SEK 51000. Depressed patients were, on average, absent from work 1.5 months during six months, which constituted 65% of the total costs for depression. Depression causes a reduction in quality of life of 50% as compared to the general population, which is in the same range as after a severe stroke. Treatment significantly improved patients' quality of life measured with a standard generic quality of life instrument (EQ-5D). For patients who went into remission, we observed both statistically significant reductions in costs and improvements in quality ...