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The Determinants of Life Expectancy: An Analysis of the OECD Health Data

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Author Info

  • James W. Shaw

    ()
    (Tobacco Control Research Branch, Behavioral Research Program, National Cancer Institute)

  • William C. Horrace

    ()
    (Department of Economics, Syracuse University)

  • Ronald J. Vogel

    ()
    (Center for Health Outcomes and PharmacoEconomic Research, College of Pharmacy, University of Arizona)

Abstract

This study considers an aggregate life expectancy production function for a sample of developed countries. We find that pharmaceutical consumption has a positive effect on life expectancy at middle and advanced ages but is sensitive to the age distribution of a given country. Thus, ignoring age distribution in a regression of life expectancy on pharmaceutical consumption creates an omitted-variable bias in the pharmaceutical coefficient. We find that doubling annual pharmaceutical expenditures adds about one year of life expectancy for males at age 40 and slightly less than a year of life expectancy for females at age 65. We also present results for lifestyle inputs into the production of life expectancy. For example, decreasing tobacco consumption by about two cigarettes per day or increasing fruit and vegetable consumption by 30% (one-third pound per day) increases life expectancy approximately one year for 40-year-old females.

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Bibliographic Info

Article provided by Southern Economic Association in its journal Southern Economic Journal.

Volume (Year): 71 (2005)
Issue (Month): 4 (April)
Pages: 768-783

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Handle: RePEc:sej:ancoec:v:71:4:y:2005:p:768-783

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Web page: http://www.southerneconomic.org/
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Cited by:
  1. Eddy Adang & George Borm, 2007. "Is there an association between economic performance and public satisfaction in health care?," The European Journal of Health Economics, Springer, vol. 8(3), pages 279-285, September.
  2. Castles, Francis G., 2011. "Has three decades of comparative public policy scholarship been focusing on the wrong question?," TranState Working Papers 155, University of Bremen, Collaborative Research Center 597: Transformations of the State.
  3. Baltagi, Badi H. & Moscone, Francesco & Tosetti, Elisa, 2011. "Medical Technology and the Production of Health Care," IZA Discussion Papers 5545, Institute for the Study of Labor (IZA).
  4. Halicioglu, Ferda, 2010. "Modelling life expectancy in Turkey," MPRA Paper 30840, University Library of Munich, Germany.
  5. Bergh, Andreas & Nilsson, Therese, 2009. "Good for Living? On the Relation between Globalization and Life Expectancy," Ratio Working Papers 136, The Ratio Institute.
  6. Bergh, Andreas & Nilsson, Therese, 2010. "Good for Living? On the Relationship between Globalization and Life Expectancy," World Development, Elsevier, vol. 38(9), pages 1191-1203, September.
  7. Mohan, Ramesh & Mirmirani, Sam, 2007. "An Assessment of OECD Health Care System Using Panel Data Analysis," MPRA Paper 6122, University Library of Munich, Germany.
  8. Paul Grootendorst & Emmanuelle PiƩrard & Minsup Shim, 2007. "The life expectancy gains from pharmaceutical drugs: a critical appraisal of the literature," Social and Economic Dimensions of an Aging Population Research Papers 221, McMaster University.
  9. Poudyal, Neelam C. & Hodges, Donald G. & Bowker, J.M. & Cordell, H.K., 2009. "Evaluating natural resource amenities in a human life expectancy production function," Forest Policy and Economics, Elsevier, vol. 11(4), pages 253-259, July.

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