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Measuring income related inequality in health and health care: the partial concentration index with direct and indirect standardisation

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  • Hugh Gravelle

Abstract

The partial concentration index measures income related inequality in health (or health care) after removing the effects of standardising variables which affect health (or health care), are correlated with income but not amenable to policy. When the marginal effects of income are independent of the standardising variables, direct standardisation yields consistent estimates of the partial concentration index. Indirect standardisation underestimates the partial concentration index whenever the standardising variables are correlated with income, irrespective of the signs of the correlation of standardising variables and income with each other and with health. A generalised version of the partial concentration index is proposed for cases where the marginal effect of income depends on the standardising variables. Direct standardisation again yields a consistent estimate but indirect standardisation does not. It is also shown that the direct standardisation procedure can be applied to individual or grouped data and that the conclusions about the merits of direct and indirect standardisation hold for grouped data.

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Paper provided by Department of Economics, University of York in its series Discussion Papers with number 01/17.

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Handle: RePEc:yor:yorken:01/17

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Keywords: Concentration index; inequality; direct standardisation.;

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  1. van Doorslaer, Eddy & Wagstaff, Adam & Bleichrodt, Han & Calonge, Samuel & Gerdtham, Ulf-G. & Gerfin, Michael & Geurts, Jose & Gross, Lorna & Hakkinen, Unto & Leu, Robert E., 1997. "Income-related inequalities in health: some international comparisons," Journal of Health Economics, Elsevier, vol. 16(1), pages 93-112, February.
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Cited by:
  1. Mark Dusheiko & Hugh Gravelle & Stephen Campbell, . "Estimating and explaining differences in income related inequality in health across general practices," Discussion Papers 02/07, Department of Economics, University of York.
  2. Matthew Sutton, 2002. "Vertical and horizontal aspects of socio-economic inequity in general practitioner contacts in Scotland," Health Economics, John Wiley & Sons, Ltd., vol. 11(6), pages 537-549.

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