Economic evaluation of surgical procedures is necessary in view of emerging, often more expensive newer techniques and the budget constraints in an increasingly cost conscious NHS. The purpose of the study was to compare the cost effectiveness of open cuff repair with arthroscopic repair for moderate size tears. This was a prospective study involving 20 patients. Ten had an arthroscopic repair and 10 had an open procedure. Effectiveness was measured by pre and post-operative Oxford scores. The patients also had Constant scores done. Costs were estimated from the departmental and hospital financial data. Rotator cuff repair was an effective operation in both the groups. At the last follow up there was no statistically significant difference in the patients Oxford and Constant scores between the two methods of repair. There was no significant difference in the time in theatre, inpatient time, post-operative analgesia, number of pre and post-operative outpatient visits, physiotherapy costs and time off work between the two groups. The arthroscopic cuff repair was significantly more expensive than open repair. The incremental cost of each arthroscopic repair was £610 higher than open procedure. This was mainly in the area of direct health-care costs (instrumentation in particular). Health care policy makers are increasingly demanding evidence of cost effectiveness of a procedure. Such data is infrequently available in orthopaedics. To our knowledge there no published cost-utility analysis for the above said two types of interventions for cuff repair. Both methods of repair are effective but in our study open cuff repair is more cost effective and is likely to have better (lower) cost-utility ratio.