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Health, Welfare and Inequality

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Author Info

  • Gabriella Berloffa

    ()
    (University of Trento)

  • Agar Brugiavini

    ()
    (Department of Economics, University Of Venice Ca’ Foscari)

  • Dino Rizzi

    ()
    (Department of Economics, University of Venice Ca’ Foscari)

Abstract

This paper uses data from the Health and Retirement Study (HRS) to study the relationship between health status and economic welfare at household level. We develop a model to estimate the welfare cost of ill health by exploiting the methodology of the equivalence scales. The crucial variables in this approach are, besides the health status (measured in several dimensions), the economic decisions of the household which can be directly related to health conditions, such as health-related expenses. By estimating a demand system we derive health-equivalence scales to learn about the cost of health conditions on economic welfare, controlling for other covariates. Our estimates suggest that – when taking account of health – the welfare of households in poor health drops substantially and inequality increases. There are important social welfare costs associated with differences in the health status of the elderly in the USA.

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File URL: http://www.unive.it/media/allegato/DIP/Economia/Working_papers/Working_papers_2006/WP_DSE_Berloffa_Brugiavini_Rizzi_41_06.pdf
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Bibliographic Info

Paper provided by Department of Economics, University of Venice "Ca' Foscari" in its series Working Papers with number 2006_41.

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Length: 32 pages
Date of creation: 2006
Date of revision:
Handle: RePEc:ven:wpaper:2006_41

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Related research

Keywords: welfare cost; health; inequality;

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References

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  1. Jérome Adda & James Banks & Hans-Martin von Gaudecker, 2007. "The Impact of Income Shocks on Health: Evidence from Cohort Data," MEA discussion paper series 07146, Munich Center for the Economics of Aging (MEA) at the Max Planck Institute for Social Law and Social Policy.
  2. Le Grand, Julian, 1978. "The Distribution of Public Expenditure: The Case of Health Care," Economica, London School of Economics and Political Science, vol. 45(178), pages 125-42, May.
  3. Jonathan Skinner & Weiping Zhou, 2004. "The Measurement and Evolution of Health Inequality: Evidence from the U.S. Medicare Population," NBER Working Papers 10842, National Bureau of Economic Research, Inc.
  4. Deaton,Angus & Muellbauer,John, 1980. "Economics and Consumer Behavior," Cambridge Books, Cambridge University Press, number 9780521296762, October.
  5. Le Grand, Julian, 1991. "The distribution of health care revisited: A commentary on Wagstaff, van Doorslaer and Paci, and O'Donnell and Propper," Journal of Health Economics, Elsevier, vol. 10(2), pages 239-245, July.
  6. Lakdawalla, Darius & Zanjani, George, 2005. "Insurance, self-protection, and the economics of terrorism," Journal of Public Economics, Elsevier, vol. 89(9-10), pages 1891-1905, September.
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Cited by:
  1. Koutsampelas, Christos & Tsakloglou, Panos, 2012. "The Distribution of Full Income in Greece," IZA Discussion Papers 6396, Institute for the Study of Labor (IZA).
  2. Gerlinde Verbist & Michael Föster & Vaalavou, M., 2013. "GINI DP 74: The Impact of Publicly Provided Services on the Distribution of Resources: Review of New Results and Methods," GINI Discussion Papers 74, AIAS, Amsterdam Institute for Advanced Labour Studies.

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