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Understanding Cross-country Differences in Health Status and Expenditures

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  • Raquel Fonseca
  • François Langot
  • Pierre-Carl Michaud
  • Thepthida Sopraseuth

Abstract

Using a general equilibrium heterogeneous agent model featuring health production, we quantify the relative contribution of price distortions in the health market, TFP and other health risks in explaining cross-country differences in health expenditure (as a share of GDP) and health status. Estimated parameters reveal a substantial price wedge that explains at most 20% of the difference in health spending (as a share of GDP) and 30% of the difference in health status between Europe and the U.S. We estimate a one percentage point negative impact on the life-time cost-of-living of Americans from higher prices due to inefficiencies.

Suggested Citation

  • Raquel Fonseca & François Langot & Pierre-Carl Michaud & Thepthida Sopraseuth, 2020. "Understanding Cross-country Differences in Health Status and Expenditures," NBER Working Papers 26876, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:26876
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    More about this item

    JEL classification:

    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health
    • I10 - Health, Education, and Welfare - - Health - - - General

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