As new health care strategies compete with existing ones for limited resources, the health care system and its providers are beginning to turn to health economic analyses to help inform choices in the delivery of care. This 2-part review examines the current health economic literature for asthma and rhinitis. This first installment of the review focuses on studies that characterize the economic burden of asthma and rhinitis and examines how resources are allocated to the care of persons with asthma and rhinitis. In 1998, asthma in the United States accounted for an estimated 12.7 billion dollars annually. Similarly, in 1994, allergic rhinitis was estimated to cost 1.2 billion dollars. Most of the costs for these conditions are attributed to direct medical expenditures, with medications emerging as the single largest cost component. Indirect costs also represent an important social effect. While cost-of-illness studies help to characterize the economic burden, comparative health economic studies evaluate the value of new and existing strategies for clinical care. The second part of this review will explore how comparative studies have contributed to understanding how to best diagnose and treat asthma and allergic rhinitis.