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Production Gains: Should They Count in Health Care Evaluations?


  • Olsen, Jan Abel


The extent to which production gains should be taken into account in economic analyses of health care depends on how the social welfare function is defined. Two welfare criteria are discussed; the utilitarian and the Pareto-criterion. According to the former there is a relevant production gain which is a welfare gain. If welfare gains are defined in terms of potential Pareto-improvements, the inclusion of production gains depends on whether any increase in health care arising from having a person return to work is larger than the amount of health care needed to cure the person, or whether those who get lower priority in terms of reduced health care are compensated through increased consumption of other goods. Copyright 1994 by Scottish Economic Society.

Suggested Citation

  • Olsen, Jan Abel, 1994. "Production Gains: Should They Count in Health Care Evaluations?," Scottish Journal of Political Economy, Scottish Economic Society, vol. 41(1), pages 69-84, February.
  • Handle: RePEc:bla:scotjp:v:41:y:1994:i:1:p:69-84

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    References listed on IDEAS

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    Cited by:

    1. Aidan R. Vining & David L. Weimer, 2013. "An assessment of important issues concerning the application of benefit–cost analysis to social policy," Chapters,in: Principles and Standards for Benefit–Cost Analysis, chapter 1, pages 25-62 Edward Elgar Publishing.
    2. Maria Raikou & Alistair McGuire, 2012. "Estimating Costs for Economic Evaluation," Chapters,in: The Elgar Companion to Health Economics, Second Edition, chapter 43 Edward Elgar Publishing.
    3. Olsen, Jan Abel, 1997. "Theories of justice and their implications for priority setting in health care," Journal of Health Economics, Elsevier, vol. 16(6), pages 625-639, December.
    4. Calcott, Paul, 2000. "Health care evaluation, utilitarianism and distortionary taxes," Journal of Health Economics, Elsevier, vol. 19(5), pages 719-730, September.

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