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Welfare State and Life Satisfaction: Evidence from Public Health Care

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  • 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 find 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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Bibliographic Info

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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Web page: http://www.tinbergen.nl

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Keywords: Life satisfaction; public provision; health care;

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  1. Di Tella, Rafael & MacCulloch, Robert J. & Oswald, Andrew J., 2001. "The Macroeconomics of Happiness," The Warwick Economics Research Paper Series (TWERPS) 615, University of Warwick, Department of Economics.
  2. Robert J. MacCulloch & Rafael Di Tella & Andrew J. Oswald, 2001. "Preferences over Inflation and Unemployment: Evidence from Surveys of Happiness," American Economic Review, American Economic Association, vol. 91(1), pages 335-341, March.
  3. Bernard M.S. van Praag & B.E. Baarsma, 2004. "Using Happiness Surveys to value Intangibles; the Case of Airport Noise," Tinbergen Institute Discussion Papers 04-024/3, Tinbergen Institute.
  4. Ada Ferrer-i-Carbonell & Paul Frijters, 2002. "How important is Methodology for the Estimates of the Determinants of Happiness?," Tinbergen Institute Discussion Papers 02-024/3, Tinbergen Institute.
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Cited by:
  1. Andrés Rodríguez-Pose & Kristina Maslauskaite, 2011. "Can policy make us happier? Individual characteristics, socioeconomic factors, and life satisfaction in Central and Eastern Europe," Bruges European Economic Research Papers 22, European Economic Studies Department, College of Europe.
  2. Zohal Hessami, 2010. "The Size and Composition of Government Spending in Europe and Its Impact on Well-Being," Kyklos, Wiley Blackwell, vol. 63(3), pages 346-382, 08.
  3. Seoyong Kim & Donggeun Kim, 2012. "Does Government Make People Happy?: Exploring New Research Directions for Government’s Roles in Happiness," Journal of Happiness Studies, Springer, vol. 13(5), pages 875-899, October.
  4. Yamamura, Eiji, 2012. "Effect of social capital on income redistribution preferences: comparison of neighborhood externality between high- and low-income households," MPRA Paper 36181, University Library of Munich, Germany.
  5. Blanchflower, David G; Oswald, Andrew, 2011. "International Happiness," CAGE Online Working Paper Series 39, Competitive Advantage in the Global Economy (CAGE).
  6. Díaz Serrano, Lluís & Rodríguez Pose, Andrés, 2013. "Decentralization and the Welfare State: What Do Citizens Perceive?," Working Papers 2072/222195, Universitat Rovira i Virgili, Department of Economics.
  7. Eiji Yamamura, 2012. "The Effects of Information Asymmetry and Government Size on Happiness: A Case Study from Japan," The IUP Journal of Governance and Public Policy, IUP Publications, vol. 0(1), pages 7-20, March.

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