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Integrating Mental Health in Welfare Evaluation: An Empirical Application

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  • Sanghamitra Das

    (Indian Statistical Institute, New Delhi)

  • Abhiroop Mukhopadhyay

    (Indian Statistical Institute, New Delhi)

  • Tridip Ray

    (Indian Statistical Institute, New Delhi)

Abstract

This paper presents simple measures of individual and family mental health indices based on axiomatic foundations and integrates mental health into a neoclassical model that allows for proper substitution possibilities in the family preferences and quantifies its significance in family utility. We find that mental health effects are far more important than the effect of consumption or children's schooling in determining family utility. We illustrate the usefulness of our approach by considering the case of HIV/AIDS experience in India. Using our approach, we find that while there are no significant differences in per capita consumption and schooling between HIV and NON HIV families, the welfare loss from HIV/AIDS are still considerably large due to the inclusion of mental health. Integrating mental health in a utility maximization framework helps us quantify this welfare loss.

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Bibliographic Info

Article provided by De Gruyter in its journal The B.E. Journal of Economic Analysis & Policy.

Volume (Year): 9 (2009)
Issue (Month): 1 ()
Pages: 41

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Handle: RePEc:bpj:bejeap:v:9:y:2009:i:1:n:41

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  1. Abhijit Banerjee & Angus Deaton & Esther Duflo, 2003. "Wealth, health, and health services in rural Rajasthan," Working Papers 253, Princeton University, Woodrow Wilson School of Public and International Affairs, Center for Health and Wellbeing..
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  4. Blanchflower, David G. & Oswald, Andrew J., 2007. "Is Well-being U-Shaped over the Life Cycle?," The Warwick Economics Research Paper Series (TWERPS) 826, University of Warwick, Department of Economics.
  5. Jeffrey R. Kling & Jeffrey B. Liebman & Lawrence F. Katz, 2005. "Experimental Analysis of Neighborhood Effects," NBER Working Papers 11577, National Bureau of Economic Research, Inc.
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  7. Clark, Andrew E & Oswald, Andrew J, 1994. "Unhappiness and Unemployment," Economic Journal, Royal Economic Society, vol. 104(424), pages 648-59, May.
  8. John Helliwell, 2005. "Well-Being, Social Capital and Public Policy: What's New?," NBER Working Papers 11807, National Bureau of Economic Research, Inc.
  9. repec:feb:natura:0017 is not listed on IDEAS
  10. Daniel Kahneman & Alan B. Krueger & David Schkade & Norbert Schwarz & Arthur A. Stone, 2006. "Would You Be Happier If You Were Richer? A Focusing Illusion," Working Papers 77, Princeton University, Department of Economics, Center for Economic Policy Studies..
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Cited by:
  1. Das, Sanghamitra & Mukhopadhyay, Abhiroop & Ray, Tridip, 2008. "Negative Reality of the HIV Positives: Evaluating Welfare Loss in a Low Prevalence Country," MPRA Paper 9946, University Library of Munich, Germany.

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