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Health, Income and Inequality: Evidence from a Survey of Older Italians

Author

Listed:
  • Gabriella Berloffa

    () (University of Trento)

  • Agar Brugiavini

    () (University "Ca' Foscari" of Venice)

  • Dino Rizzi

    () (University "Ca' Foscari" of Venice)

Abstract

This paper uses the Survey of Health, Ageing and Wealth (SHAW) to study the relationship between health status and economic welfare at individual level. We develop a model to estimate the welfare cost of ill-health: the terminology and the intuition go along the lines of the equivalence scale literature. While in that case the focus is on the welfare cost brought about by the presence of children, we measure the welfare cost of poor health. The crucial variables in this approach are, besides income and health status, 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 equivalence scales based also on health expenditures to learn about the cost of health conditions on economic welfare, controlling for other covariates. We show that households characterised by poor health are effectively “poorer” in an economic sense.

Suggested Citation

  • Gabriella Berloffa & Agar Brugiavini & Dino Rizzi, 2003. "Health, Income and Inequality: Evidence from a Survey of Older Italians," Giornale degli Economisti, GDE (Giornale degli Economisti e Annali di Economia), Bocconi University, vol. 62(1), pages 35-55, April.
  • Handle: RePEc:gde:journl:gde_v62_n1_p35-55
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    References listed on IDEAS

    as
    1. Angus Deaton, 2001. "Relative Deprivation, Inequality, and Mortality," NBER Working Papers 8099, National Bureau of Economic Research, Inc.
    2. Deaton,Angus & Muellbauer,John, 1980. "Economics and Consumer Behavior," Cambridge Books, Cambridge University Press, number 9780521296762.
    3. Anne Case & Darren Lubotsky & Christina Paxson, 2002. "Economic Status and Health in Childhood: The Origins of the Gradient," American Economic Review, American Economic Association, vol. 92(5), pages 1308-1334, December.
    4. Deaton, Angus S & Muellbauer, John, 1980. "An Almost Ideal Demand System," American Economic Review, American Economic Association, vol. 70(3), pages 312-326, June.
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    Cited by:

    1. 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.

    More about this item

    Keywords

    health; inequality and welfare;

    JEL classification:

    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies

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