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The Determinants of Life Expectancy: An Analysis of the OECD Health Data

Author

Listed:
  • James W. Shaw

    () (Tobacco Control Research Branch, Behavioral Research Program, National Cancer Institute)

  • William C. Horrace

    () (Department of Economics, Syracuse University)

  • Ronald J. Vogel

    () (Center for Health Outcomes and PharmacoEconomic Research, College of Pharmacy, University of Arizona)

Abstract

This study considers an aggregate life expectancy production function for a sample of developed countries. We find that pharmaceutical consumption has a positive effect on life expectancy at middle and advanced ages but is sensitive to the age distribution of a given country. Thus, ignoring age distribution in a regression of life expectancy on pharmaceutical consumption creates an omitted-variable bias in the pharmaceutical coefficient. We find that doubling annual pharmaceutical expenditures adds about one year of life expectancy for males at age 40 and slightly less than a year of life expectancy for females at age 65. We also present results for lifestyle inputs into the production of life expectancy. For example, decreasing tobacco consumption by about two cigarettes per day or increasing fruit and vegetable consumption by 30% (one-third pound per day) increases life expectancy approximately one year for 40-year-old females.

Suggested Citation

  • James W. Shaw & William C. Horrace & Ronald J. Vogel, 2005. "The Determinants of Life Expectancy: An Analysis of the OECD Health Data," Southern Economic Journal, Southern Economic Association, vol. 71(4), pages 768-783, April.
  • Handle: RePEc:sej:ancoec:v:71:4:y:2005:p:768-783
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    Citations

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    Cited by:

    1. Amjad Ali & Marc Audi, 2016. "The Impact of Income Inequality, Environmental Degradation and Globalization on Life Expectancy in Pakistan: An Empirical Analysis," International Journal of Economics and Empirical Research (IJEER), The Economics and Social Development Organization (TESDO), vol. 4(4), pages 182-193, April.
    2. Badi Baltagi & Francesco Moscone & Elisa Tosetti, 2012. "Medical technology and the production of health care," Empirical Economics, Springer, vol. 42(2), pages 395-411, April.
    3. Paul Grootendorst & Emmanuelle Piérard & Minsup Shim, 2007. "The life expectancy gains from pharmaceutical drugs: a critical appraisal of the literature," Social and Economic Dimensions of an Aging Population Research Papers 221, McMaster University.
    4. Eddy Adang & George Borm, 2007. "Is there an association between economic performance and public satisfaction in health care?," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 8(3), pages 279-285, September.
    5. Bergh, Andreas & Nilsson, Therese, 2009. "Good for Living? On the Relation between Globalization and Life Expectancy," Ratio Working Papers 136, The Ratio Institute.
    6. repec:spt:admaec:v:7:y:2017:i:5:f:7_5_4 is not listed on IDEAS
    7. Wen-Yi Chen & Miin-Jye Wen & Yu-Hui Lin & Yia-Wun Liang, 2016. "On the relationship between healthcare expenditure and longevity: evidence from the continuous wavelet analyses," Quality & Quantity: International Journal of Methodology, Springer, vol. 50(3), pages 1041-1057, May.
    8. Cappellari, Lorenzo & De Paoli, Anna & Turati, Gilberto, 2014. "Do Market Incentives in the Hospital Industry Affect Subjective Health Perceptions? Evidence from the Italian PPS-DRG Reform," IZA Discussion Papers 8636, Institute for the Study of Labor (IZA).
    9. Ya-Hui Huang & Chien-Chiang Lee & Chun-Ping Chang, 2016. "Medical Personnel and Life Expectancy: New Evidence from Taiwan," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 128(3), pages 1425-1447, September.
    10. Lorenzo Cappellari & Anna De Paoli & Gilberto Turati, 2016. "Do market incentives for hospitals affect health and service utilization?: evidence from prospective pay system–diagnosis-related groups tariffs in Italian regions," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 179(4), pages 885-905, October.
    11. Bergh, Andreas & Nilsson, Therese, 2010. "Good for Living? On the Relationship between Globalization and Life Expectancy," World Development, Elsevier, vol. 38(9), pages 1191-1203, September.
    12. Poudyal, Neelam C. & Hodges, Donald G. & Bowker, J.M. & Cordell, H.K., 2009. "Evaluating natural resource amenities in a human life expectancy production function," Forest Policy and Economics, Elsevier, vol. 11(4), pages 253-259, July.
    13. Halicioglu, Ferda, 2011. "Modeling life expectancy in Turkey," Economic Modelling, Elsevier, vol. 28(5), pages 2075-2082, September.
    14. Lorenzo Cappellari & Anna De Paoli & Gilberto Turati, 2016. "Do Market Incentives for Hospitals Affect Health and Service Utilization? Evidence from PPS-DRG Tariffs in Italian Regions," CESifo Working Paper Series 5804, CESifo Group Munich.
    15. Castles, Francis G., 2011. "Has three decades of comparative public policy scholarship been focusing on the wrong question?," TranState Working Papers 155, University of Bremen, Collaborative Research Center 597: Transformations of the State.
    16. Mohan, Ramesh & Mirmirani, Sam, 2007. "An Assessment of OECD Health Care System Using Panel Data Analysis," MPRA Paper 6122, University Library of Munich, Germany.
    17. Asiskovitch, Sharon, 2010. "Gender and health outcomes: The impact of healthcare systems and their financing on life expectancies of women and men," Social Science & Medicine, Elsevier, vol. 70(6), pages 886-895, March.

    More about this item

    JEL classification:

    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior

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