Nations generally measure their economic performance using the yardstick of national output and income. It is not widely recognized, however, that conventional measures of national income and output exclude the value of improvements in the health status of the population. The present study develops a methodology and presents preliminary estimates of how standard economic measures would change if they adequately reflected improvements in health status. The study first discusses the theory of the measurement of national income, examines some of the shortcomings of traditional concepts, and proposes a new concept called 'health income' that can be used to incorporate improvements in health status. The study next discusses how the proposed measure fits into existing theories for measuring and valuing consumption and health status. The study applies the new concepts to data for the United States over the twentieth century and concludes that accounting for improvements in the health status would substantially increase the estimated improvement in economic welfare for the U.S. over the twentieth century.
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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number
8818.
Length: Date of creation: Feb 2002 Date of revision: Handle: RePEc:nbr:nberwo:8818
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Find related papers by JEL classification: I1 - Health, Education, and Welfare - - Health N1 - Economic History - - Macroeconomics and Monetary Economics; Growth and Fluctuations
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References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
David M. Cutler & Mark McClellan & Joseph P. Newhouse & Dahlia Remler, 1996.
"Are Medical Prices Declining?,"
NBER Working Papers
5750, National Bureau of Economic Research, Inc.
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