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Equivalent income and fair evaluation of health care

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  • FLEURBAEY, Marc
  • LUCHINI, Stéphane
  • MULLER, Christophe
  • SCHOKKAERT, Erik

Abstract

We argue that the economic evaluation of health care (cost–benefit analysis) should respect individual preferences and should incorporate distributional considerations. Relying on individual preferences does not imply subjective welfarism. We propose a particular non-welfarist approach, based on the concept of equivalent income, and show how it helps to define distributional weights. We illustrate the feasibility of our approach with empirical results from a pilot survey.
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Suggested Citation

  • FLEURBAEY, Marc & LUCHINI, Stéphane & MULLER, Christophe & SCHOKKAERT, Erik, 2013. "Equivalent income and fair evaluation of health care," LIDAM Reprints CORE 2486, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  • Handle: RePEc:cor:louvrp:2486
    DOI: 10.1002/hec.2859
    Note: In : Health Economics, 22(6), 711-729, 2013
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    12. Marc Fleurbaey & Philippe Mongin, 2005. "The news of the death of welfare economics is greatly exaggerated," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 25(2), pages 381-418, December.
    13. Donaldson, Cam, 1999. "Valuing the benefits of publicly-provided health care: does 'ability to pay' preclude the use of 'willingness to pay'?," Social Science & Medicine, Elsevier, vol. 49(4), pages 551-563, August.
    14. Marc Fleurbaey, 2005. "Health, Wealth, and Fairness," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 7(2), pages 253-284, May.
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    20. Richard D. Smith, 2003. "Construction of the contingent valuation market in health care:a critical assessment," Health Economics, John Wiley & Sons, Ltd., vol. 12(8), pages 609-628, August.
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    Cited by:

    1. Koen Decancq & Marc Fleurbaey & François Maniquet, 2019. "Multidimensional poverty measurement with individual preferences," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 17(1), pages 29-49, March.
    2. Nurmi, Väinö & Ahtiainen, Heini, 2018. "Distributional Weights in Environmental Valuation and Cost-benefit Analysis: Theory and Practice," Ecological Economics, Elsevier, vol. 150(C), pages 217-228.
    3. Victor Champonnois & Olivier Chanel, 2023. "Accounting for subsistence needs in non-market valuation: a simple proposal," Journal of Environmental Planning and Management, Taylor & Francis Journals, vol. 66(5), pages 1037-1060, April.
    4. Sayaka Sakoda, 2022. "Estimating economic unfairness in Japan and policies toward fairness," International Journal of Economic Policy Studies, Springer, vol. 16(1), pages 85-111, February.
    5. Koen Decancq & Dirk Neumann, 2014. "Does the Choice of Well-Being Measure Matter Empirically?: An Illustration with German Data," SOEPpapers on Multidisciplinary Panel Data Research 717, DIW Berlin, The German Socio-Economic Panel (SOEP).
    6. Richard Cookson & Ieva Skarda & Owen Cotton‐Barratt & Matthew Adler & Miqdad Asaria & Toby Ord, 2021. "Quality adjusted life years based on health and consumption: A summary wellbeing measure for cross‐sectoral economic evaluation," Health Economics, John Wiley & Sons, Ltd., vol. 30(1), pages 70-85, January.
    7. C. Baunez & Mickael Degoulet & Stéphane Luchini & Patrick Pintus & Miriam Teschl, 2020. "Sub-National Allocation of COVID-19 Tests: An Efficiency Criterion with an Application to Italian Regions," Post-Print hal-03140005, HAL.
    8. Marko Ledić & Ivica Rubil, 2021. "Beyond Wage Gap, Towards Job Quality Gap: The Role of Inter-Group Differences in Wages, Non-Wage Job Dimensions, and Preferences," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 155(2), pages 523-561, June.
    9. Shun-ichiro Bessho & Masayoshi Hayashi, 2015. "Should the Japanese tax system be more progressive? An evaluation using the simulated SMCFs based on the discrete choice model of labor supply," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 22(1), pages 144-175, February.
    10. John E. Roemer & Alain Trannoy, 2013. "Equality of Opportunity," Cowles Foundation Discussion Papers 1921, Cowles Foundation for Research in Economics, Yale University.
    11. Andres Felipe Hoyos Martin, 2015. "Measuring and Comparing Well-Being in South American Countries Using Equivalent Incomes," Icesi Economics Working Papers 14570, Universidad Icesi.
    12. Luyten, Jeroen & Kessels, Roselinde & Atkins, Katherine E. & Jit, Mark & van Hoek, Albert Jan, 2019. "Quantifying the public's view on social value judgments in vaccine decision-making: A discrete choice experiment," Social Science & Medicine, Elsevier, vol. 228(C), pages 181-193.
    13. Marc Fleurbaey & Erik Schokkaert, 2013. "Behavioral Welfare Economics and Redistribution," American Economic Journal: Microeconomics, American Economic Association, vol. 5(3), pages 180-205, August.
    14. Dietrich, Stephan & Malerba, Daniele & Barrientos, Armando & Gassmann, Franziska, 2017. "Rates of return to antipoverty transfers in Uganda," MERIT Working Papers 2017-040, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    15. Armando Barrientos & Stephan Dietrich & Franziska Gassmann & Daniele Malerba, 2022. "Prioritarian rates of return to antipoverty transfers," Journal of International Development, John Wiley & Sons, Ltd., vol. 34(3), pages 550-563, April.
    16. Brigitte Dormont & Anne-Laure Samson & Marc Fleurbaey & Stéphane Luchini & Erik Schokkaert, 2018. "Individual Uncertainty About Longevity," Demography, Springer;Population Association of America (PAA), vol. 55(5), pages 1829-1854, October.
    17. Brown, Zachary Steven, 2022. "Distributional policy impacts, WTP-WTA disparities, and the Kaldor-Hicks tests in benefit-cost analysis," Journal of Environmental Economics and Management, Elsevier, vol. 113(C).
    18. Pierre-Alexandre Mahieu & Romain Craste & Bengt Kriström & Pere Riera, 2014. "Non-market valuation in France: An overview of the research activity," Working Papers hal-01087365, HAL.
    19. Matthew D. Adler, 2016. "Editor's Choice Benefit–Cost Analysis and Distributional Weights: An Overview," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 10(2), pages 264-285.

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