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Disability Costs and Equivalence Scales in the Older Population in Great Britain

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  • Marcello Morciano
  • Ruth Hancock
  • Stephen Pudney

Abstract

type="main"> We use a standard of living (SoL) approach to estimate older people's disability costs, using data on 8000 individuals from the U.K. Family Resources Survey. We extend previous research in two ways. First, by allowing for a more flexible relationship between SoL and income, the structure of the estimated disability cost and equivalence scale is not dictated by a restrictive functional form assumption. Second, we allow for the latent nature of disability and SoL, addressing measurement error in the disability and SoL indicators in surveys. We find that disability costs are strongly related to severity of disability, and vary with income in absolute and proportionate terms. Older people above the median disability level require an extra £99 per week (2007 prices) on average to reach the SoL of an otherwise similar person at the median. Costs faced by older people in the highest decile of disability average £180.

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  • Marcello Morciano & Ruth Hancock & Stephen Pudney, 2015. "Disability Costs and Equivalence Scales in the Older Population in Great Britain," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 61(3), pages 494-514, September.
    • Handle: RePEc:bla:revinw:v:61:y:2015:i:3:p:494-514
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    File URL: http://hdl.handle.net/10.1111/roiw.12108
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    References listed on IDEAS

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    1. Thesis Thursday: Elizabeth Lemmon
      by Chris Sampson in The Academic Health Economists' Blog on 2019-08-15 06:00:18

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    Cited by:

    1. Áine Roddy, 2022. "Income and conversion handicaps: estimating the impact of child chronic illness/disability on family income and the extra cost of child chronic illness/child disability in Ireland using a standard of ," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 23(3), pages 467-483, April.
    2. Angela Daley & Thesia I. Garner & Shelley Phipps & Eva Sierminska, 2020. "Differences across Place and Time in Household Expenditure Patterns: Implications for the Estimation of Equivalence Scales," Economic Working Papers 520, Bureau of Labor Statistics.
    3. Roddy, Áine, 2022. "Income and conversion handicaps: estimating the impact of child chronic illness/disability on family income and the extra cost of child chronic illness/child disability in Ireland using a standard of ," LSE Research Online Documents on Economics 111833, London School of Economics and Political Science, LSE Library.
    4. Son Nghiem & Rasheda Khanam & Xuan-Binh Vu & Bach Xuan Tran, 2020. "Implicitly Estimating the Cost of Mental Illness in Australia: A Standard-of-Living Approach," Applied Health Economics and Health Policy, Springer, vol. 18(2), pages 261-270, April.
    5. Kanabar, Ricky & Nandi, Alita & Perez, Victor, 2018. "Low income dynamics among ethnic minorities in Great Britain," ISER Working Paper Series 2018-06, Institute for Social and Economic Research.
    6. Ludovico Carraro & Alex Robinson & Bilal Hakeem & Abner Manlapaz & Rosela Agcaoili, 2023. "Disability-Related Costs of Children with Disabilities in the Philippines," IJERPH, MDPI, vol. 20(13), pages 1-18, July.
    7. Davillas, Apostolos & Pudney, Stephen, 2020. "Biomarkers, disability and health care demand," Economics & Human Biology, Elsevier, vol. 39(C).
    8. Kanabar, Ricky, 2017. "In or out? Poverty dynamics among older individuals in the UK," Journal of Pension Economics and Finance, Cambridge University Press, vol. 16(4), pages 509-553, October.
    9. Chiara Mussida & Dario Sciulli, 2022. "Disability and Material Deprivation: A Profile of Disadvantage in Italy," Rivista Internazionale di Scienze Sociali, Vita e Pensiero, Pubblicazioni dell'Universita' Cattolica del Sacro Cuore, vol. 130(2), pages 169-190.
    10. Angela Daley & Thesia Garner & Shelley Phipps & Eva Sierminska, 2020. "Differences across countries and time in household expenditure patterns: implications for the estimation of equivalence scales," International Review of Applied Economics, Taylor & Francis Journals, vol. 34(6), pages 734-757, November.
    11. Binh Vu & Rasheda Khanam & Maisha Rahman & Son Nghiem, 2020. "The costs of disability in Australia: a hybrid panel-data examination," Health Economics Review, Springer, vol. 10(1), pages 1-10, December.
    12. Egemen İpek, 2020. "The Costs of Disability in Turkey," Journal of Family and Economic Issues, Springer, vol. 41(2), pages 229-237, June.
    13. Guido Migliaccio, 2019. "Disabled People in the Stakeholder Theory: a Literature Analysis," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 10(4), pages 1657-1678, December.
    14. Daniel Mont & Zachary Morris & Mercoledi Nasiir & Nanette Goodman, 2022. "Estimating Households’ Expenditures on Disability in Africa: The Uses and Limitations of the Standard of Living Method," IJERPH, MDPI, vol. 19(23), pages 1-17, December.
    15. Morris, Zachary A. & Zaidi, Asghar, 2020. "Estimating the extra costs of disability in European countries: Implications for poverty measurement and disability-related decommodification," LSE Research Online Documents on Economics 103778, London School of Economics and Political Science, LSE Library.
    16. Selcuk Beduk, 2018. "Missing the Unhealthy? Examining Empirical Validity of Material Deprivation Indices (MDIs) Using a Partial Criterion Variable," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 135(1), pages 91-115, January.
    17. Lukas Schuelke & Luke Munford & Marcello Morciano, 2022. "Estimating the additional costs of living with a disability in the United Kingdom between 2013 and 2016," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 23(2), pages 313-327, March.
    18. Michael Palmer & Jenny Williams & Barbara McPake, 2019. "Standard of Living and Disability in Cambodia," Journal of Development Studies, Taylor & Francis Journals, vol. 55(11), pages 2382-2402, November.
    19. Oznur Ozdamar & Eleftherios Giovanis, 2016. "The Link between Health Condition Costs and Standard of Living: A Structural Equation Modelling," Working Papers 1060, Economic Research Forum, revised 11 Jan 2016.
    20. Giovanis, Eleftherios, 2023. "Cultural Participation and Extra Disability and Health Costs of Syrian Migrants in Turkey," MPRA Paper 116299, University Library of Munich, Germany.
    21. Sarantis Tsiaplias, 2021. "The Welfare Implications of Unobserved Heterogeneity," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 67(4), pages 1029-1051, December.
    22. Eleftherios Giovanis & Martina Menon & Federico Perali, 2023. "Disability specific equivalence scales: a case–control approach applied to the cost of acquired brain injuries," International Journal of Health Economics and Management, Springer, vol. 23(4), pages 643-672, December.

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