Short-run economic consequences of 'malaria' on households were examined in a household survey in Matale, a malaria-endemic district of Sri Lanka. On average a household incurred a total cost of Rs 318 (US$ 7) per patient who fully recovered from 'malaria'. 24% of this was direct cost, 44% indirect cost for the patient and 32% indirect cost for the household. Direct costs were greater for those seeking treatment in the private sector. Notably a large proportion of direct costs was spent on complementary goods such as vitamins and foods considered to be nutritional. Indirect cost was measured and valued on the basis of output/ income losses incurred at the household level rather than using a general indicator such as average wage rate. Loss of output and wages accounted for the highest proportion of the indirect cost of the patients as well as the households. Relative to children, more young adults and middle-aged people had 'malaria' which also caused greater economic loss in these age groups. Women tended to care for patients rather than substitute their labour to cover productive work lost due to illness. We compare the methods used by other researchers for valuing indirect cost, demonstrating the significant impact that methods of measurement and valuation can have on the estimation of indirect cost, and justify the recommendation for methodological research in this area.