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An experimental test of the concentration index

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  • Bleichrodt, Han
  • Rohde, Kirsten I.M.
  • Van Ourti, Tom

Abstract

The concentration index is widely used to measure income-related inequality in health. No insight exists, however, whether the concentration index connects with people's preferences about distributions of income and health and whether a reduction in the concentration index reflects an increase in social welfare. We explored this question by testing the central assumption underlying the concentration index and found that it was systematically violated. We also tested the validity of alternative health inequality measures that have been proposed in the literature. Our data showed that decreases in the spread of income and health were considered socially desirable, but decreases in the correlation between income and health not necessarily. Support for a condition implying that the inequality in the distribution of income and in the distribution of health can be considered separately was mixed.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Health Economics.

Volume (Year): 31 (2012)
Issue (Month): 1 ()
Pages: 86-98

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Handle: RePEc:eee:jhecon:v:31:y:2012:i:1:p:86-98

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Web page: http://www.elsevier.com/locate/inca/505560

Related research

Keywords: Health inequality; Concentration index; Multidimensional inequality measurement; Experimental measurement; Social choice;

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Cited by:
  1. Hansen, Fredrik & Anell, Anders & Gerdtham, Ulf-G & Lyttkens, Carl Hampus, 2013. "The Future of Health Economics: The Potential of Behavioral and Experimental Economics," Working Papers 2013:20, Lund University, Department of Economics.
  2. Paul Allanson & Dennis Petrie, 2012. "Understanding the vertical equity judgements underpinning health inequality measures," Dundee Discussion Papers in Economics 264, Economic Studies, University of Dundee.
  3. Benoît Tarroux, 2012. "Appraising two-Dimensional Inequality: A Questionnaire-Experimental Approach," Economics Working Paper Archive (University of Rennes 1 & University of Caen) 201216, Center for Research in Economics and Management (CREM), University of Rennes 1, University of Caen and CNRS.

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