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Integrating mental health in welfare evaluation: An Empirical application

  • Sanghamitra Das

    (Indian Statistical Institute, New Delhi)

  • Abhiroop Mukhopadhyay

    ()

    (Indian Statistical Institute, New Delhi)

  • Tridip Ray

    ()

    (Indian Statistical Institute, New Delhi)

This paper presents simple measures of individual and family mental health indices based on axiomatic foundations and integrates mental health into a neoclassical model that allows for proper substitution possibilities in the family preferences and quantifies its significance in family utility. We find that mental health effects are far more important than the effect of consumption or children's schooling in determining family utility. We illustrate the usefulness of our approach by considering the case of HIV/AIDS experience in India. Using our approach, we find that while there are no significant differences in per capita consumption and schooling between HIV and NON HOV families, the cost of HIV/AIDS are still considerably large due to the inclusion of mental health. Integrating mental health in a utility maximization framework helps us quantify these costs.

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File URL: http://www.isid.ac.in/~pu/dispapers/dp07-06.pdf
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Paper provided by Indian Statistical Institute, New Delhi, India in its series Indian Statistical Institute, Planning Unit, New Delhi Discussion Papers with number 07-06.

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Length: 27 pages
Date of creation: Aug 2007
Date of revision:
Handle: RePEc:ind:isipdp:07-06
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  1. Oswald, Andrew J, 1997. "Happiness and Economic Performance," Economic Journal, Royal Economic Society, vol. 107(445), pages 1815-31, November.
  2. Clark, Andrew E & Oswald, Andrew J, 1994. "Unhappiness and Unemployment," Economic Journal, Royal Economic Society, vol. 104(424), pages 648-59, May.
  3. Blanchflower, David G. & Oswald, Andrew J., 2007. "Is Well-being U-Shaped over the Life Cycle?," The Warwick Economics Research Paper Series (TWERPS) 826, University of Warwick, Department of Economics.
  4. Jeffrey R. Kling & Jeffrey B. Liebman & Lawrence F. Katz, 2005. "Experimental Analysis of Neighborhood Effects," NBER Working Papers 11577, National Bureau of Economic Research, Inc.
  5. Keane, Michael P., 2010. "Structural vs. atheoretic approaches to econometrics," Journal of Econometrics, Elsevier, vol. 156(1), pages 3-20, May.
  6. John F. Helliwell, 2006. "Well-Being, Social Capital and Public Policy: What's New?," Economic Journal, Royal Economic Society, vol. 116(510), pages C34-C45, 03.
  7. Abhijit Banerjee & Angus Deaton & Esther Duflo, 2003. "Wealth, health, and health services in rural Rajasthan," Working Papers 253, Princeton University, Woodrow Wilson School of Public and International Affairs, Center for Health and Wellbeing..
  8. Blanchflower, David G. & Oswald, Andrew J., 2004. "Well-being over time in Britain and the USA," Journal of Public Economics, Elsevier, vol. 88(7-8), pages 1359-1386, July.
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