Report is a step-by-step guide to the practical application of economic evaluation within the social welfare field. It is the second volume of a report resulting from a two-year project to promote better understanding and use of economic evaluations. Volume I (Sefton et al., 2002) focuses on the application of. economic approaches to a social welfare context, while this report provides more detailed technical advice on how some of these approaches might be applied in practice. Inevitably, there is some overlap between the two volumes to enable each to stand alone.