The worldwide incidence of kidney failure is on the rise and treatment is costly; thus, the global burden of illness is growing. Kidney failure patients require either a kidney transplant or dialysis to maintain life. This review focuses on the economics of dialysis. Alternative dialysis modalities are haemodialysis (HD) and peritoneal dialysis (PD). Important economic factors influencing dialysis modality selection include financing, reimbursement and resource availability. In general, where there is little or no facility or physician reimbursement or payment for PD, the share of PD is very low. Regarding resource availability, when centre HD capacity is high, there is an incentive to use that capacity rather than place patients on home dialysis. In certain countries, there is interest in revising the reimbursement structure to favour home-based therapies, including PD and home HD. Modality selection is influenced by employment status, with an association between being employed and PD as the modality choice. Cost drivers differ for PD and HD. PD is driven mainly by variable costs such as solutions and tubing, while HD is driven mainly by fixed costs of facility space and staff. Many cost comparisons of dialysis modalities have been conducted. A key factor to consider in reviewing cost comparisons is the perspective of the analysis because different costs are relevant for different perspectives. In developed countries, HD is generally more expensive than PD to the payer. Additional research is needed in the developing world before conclusive statements may be made regarding the relative costs of HD and PD.