This study is a design research study for developingsimulation modeling to estimate costs and outcomes fromintroducing a rapid malaria diagnostic test. The study was basedon Thai data but is intended to provide a general guide tosimilar analyses in any country. It was based on analytic methodsand tools of health economics research, including cost/benefitanalysis, forecasting, linear regression, record analysis, andinterview. Simulation modeling was developed using foxpro software,working on one database file and one program file, from 47 inputdata, reflecting various activities related to malaria diagnosisand treatment. The program provides output data including costsand their components, benefit and their components, benefit/costratio with a defined time frame, defined interest rate, definedpopulation size and growth rate, and a projected rate ofdecreased malaria incidence. The feasibility of the simulation modeling was tested usingThai Malaria Division data, with a new rapid malaria diagnosticassay (ParaSight) presently under development as a test system.It was demonstrated that the computer modlling program can be asuitable tool for rapid appraisal. In testing the modelling,particular interest focused on the benefit from potentialreduction of drug wastage, which was determined to be asubstantial contributor to current costs. It was found that arapid on the spot diagnostic test could reduce markedly this drugwastage (an intermediate outcome). This could have consequenteffects on drug usage policy and perhaps on malaria drugresistance patterns: these are final outcome beyond the presentanalysis. While there are limitations to the simulation modeling aspresently formulated, the study demonstrates the generalusefulness of this approach in providing a more complete approachto benefit/cost analysis of malaria diagnostic tests.