The estimation of cost-effectiveness of pediatric critical care services is an extremely relevant issue for both developing and industrialized nations. Pediatric critical care is expensive and the long outcomes are still relatively unclear. From the perspective of patients who receive the benefits of these services, there may be little controversy regarding cost-effectiveness. However, the issue becomes very complex when attempts are made to identify which patients will benefit most. This also needs to be considered while developing public policy when decisions for allocation of limited resources need to be made within health care systems, and choices need to be made between the provision of health care and other public services. This article addresses the complex issue of economic evaluations and describes various type of cost analyses. The difference between charges and costs is defined, and a discussion of the measurement of costs and benefits, and their relationship to outcomes research is provided. Although there is not a unique answer to the issue of cost-effectiveness for pediatric critical care services, the available literature particularly from the United States is summarized, and the ethical implications explored.