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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 HOV families, the cost of HIV/AIDS are still considerably large due to the inclusion of mental health. Integrating mental health in a utility maximization framework helps us quantify these costs.

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Bibliographic Info

Paper provided by Indian Statistical Institute, New Delhi, India in its series Indian Statistical Institute, Planning Unit, New Delhi Discussion Papers with number 07-06.

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Length: 27 pages
Date of creation: Aug 2007
Date of revision:
Handle: RePEc:ind:isipdp:07-06

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  1. John Helliwell, 2005. "Well-Being, Social Capital and Public Policy: What's New?," NBER Working Papers 11807, National Bureau of Economic Research, Inc.
  2. Blanchflower, David G. & Oswald, Andrew J., 2008. "Is well-being U-shaped over the life cycle?," Social Science & Medicine, Elsevier, vol. 66(8), pages 1733-1749, April.
  3. Abhijit Banerjee & Angus Deaton & Esther Duflo, 2003. "Wealth, health, and health services in rural Rajasthan," Working Papers 175, Princeton University, Woodrow Wilson School of Public and International Affairs, Research Program in Development Studies..
  4. Oswald, Andrew, 1997. "Happiness and Economic Performance," The Warwick Economics Research Paper Series (TWERPS) 478, University of Warwick, Department of Economics.
  5. Blanchflower, David G. & Oswald, Andrew J., 2004. "Well-being over time in Britain and the USA," Journal of Public Economics, Elsevier, vol. 88(7-8), pages 1359-1386, July.
  6. Jeffrey R Kling & Jeffrey B Liebman & Lawrence F Katz, 2007. "Experimental Analysis of Neighborhood Effects," Econometrica, Econometric Society, vol. 75(1), pages 83-119, 01.
  7. Keane, Michael P., 2010. "Structural vs. atheoretic approaches to econometrics," Journal of Econometrics, Elsevier, vol. 156(1), pages 3-20, May.
  8. Clark, Andrew E & Oswald, Andrew J, 1994. "Unhappiness and Unemployment," Economic Journal, Royal Economic Society, vol. 104(424), pages 648-59, May.
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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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