To evaluate the effect of adverse events associated with live attenuated influenza vaccine (LAIV) in children younger than 5 years on the cost-effectiveness of influenza vaccination.Design: A decision analytic model was developed to predict costs and health effects of no vaccination, vaccination with LAIV, and vaccination with inactivated influenza vaccine (IIV). Probabilities, costs, and quality adjustments for uncomplicated influenza, outpatient visits, hospitalizations, deaths, vaccination, and vaccine adverse events were based on primary and published data. The analysis included the possible increased incidence of adverse events following vaccination with LAIV for children younger than 5 years, including fever, wheezing, and hospitalization. A societal perspective was used. Sensitivity analyses, including probabilistic sensitivity analysis, were conducted.Setting: Vaccination in the physician office setting in the United States.Participants: Hypothetical cohorts of healthy children aged 6 months to 4 years.Intervention: Vaccination with LAIV or IIV.Main Outcome Measure: Incremental cost-effectiveness ratio in dollars per quality-adjusted life-year (QALY).