With increasing chronic disease and disability burden as a result of the aging of populations worldwide, cost estimates of disease and disability are important in determining:the most cost-effective methods in delivering healthcare in order to maximise resources; andhealth policies and resource allocation.Cost may be divided into direct, indirect and intangible costs. Economic evaluations include cost-benefit, cost-effectiveness and cost-utility studies. In obtaining data for these studies, a multidisciplinary effort is required. Data include epidemiological, healthcare utilisation and cost data (e.g. based on disease-related groups), outcome measures and national sickness, unemployment and productivity figures.Examples of cost-of-illness studies show that chronic diseases constitute a significant economic burden for societies, in terms of either direct or indirect costs. Using such data, healthcare policies may be formulated towards cost reduction, whether preventive or interventional. Decisions regarding choice of drug treatments or methods of service delivery may also be based on such information. Conflicting perspectives from healthcare providers, society or individual viewpoints may render decisions regarding resource allocation based on such estimates controversial.