Even though institutions rather than ageing influence medical expenditure at the aggregate level, measuring the expected impact of changes in need (age and health status) on expenditure in a given national health care system allows one to assess how institutions allocate resources across ages. I attempt such a decomposition of the variation of medical expenditure between need, socio- economic circumstances and technology in the case of France, using a unique data set at the individual level. I use morbidity as an indicator of health and test for endogeneity of health to expenditure, as well as for temporal stability of the relationship between health and medical care.
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