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Welfare State and Life Satisfaction: Evidence from Public Health Care

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Author Info
Jani-Petri Laamanen () (FDPE, and University of Tampere)
Kaisa Kotakorpi () (FDPE, and University of Tampere)
Abstract

We examine the effect of publicly provided health care on welfare by combining local level data on public health care, and individual level data on life satisfaction. It is shown that relatively high expenditures in health care have a positive effect on individuals' life satisfaction in our data. We further illustrate how life satisfaction data can be used to directly test theoretical hypotheses about how the welfare effect of public provision should vary among different groups in the population. We …nd some evidence for an "ends-against-the-middle" equilibrium (Epple and Romano, 1996) in the provision of public health care, where middle-income individuals prefer higher public expenditure at the margin than low-income or high-income individuals. Further, our results indicate that valuation for health care depends on individual political orientation.

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Paper provided by Tinbergen Institute in its series Tinbergen Institute Discussion Papers with number 07-053/3.

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Date of creation: 16 Jul 2007
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Handle: RePEc:dgr:uvatin:20070053

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Related research
Keywords: Life satisfaction public provision health care

Find related papers by JEL classification:
H44 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Goods: Mixed Markets
I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

This paper has been announced in the following NEP Reports:

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  13. Bruno S. Frey & Simon Luechinger & Alois Stutzer, 2004. "Valuing Public Goods: The Life Satisfaction Approach," CREMA Working Paper Series 2004-11, Center for Research in Economics, Management and the Arts (CREMA). [Downloadable!]
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