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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. Grossman, Michael, 1972. "On the Concept of Health Capital and the Demand for Health," Journal of Political Economy, University of Chicago Press, vol. 80(2), pages 223-55, March-Apr.
  2. 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.
  3. 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.
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Citations

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Cited by:
  1. Paulus, Alari & Sutherland, Holly & Tsakloglou, Panos, 2009. "The Distributional Impact of In Kind Public Benefits in European Countries," IZA Discussion Papers 4581, Institute for the Study of Labor (IZA).
  2. Christos Koutsampelas & Panos Tsakloglou, 2012. "The distribution of full income in Greece," University of Cyprus Working Papers in Economics 03-2012, University of Cyprus Department of Economics.

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