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Health care and social care: complements, substitutes and attributes

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  • Wildman, John
  • McMeekin, Peter

Abstract

Ageing populations are a major challenge for most developed countries, where social security systems were developed in the post war period. It has been suggested that the costs of caring for the ageing population places a considerable strain on individuals, as well as on the public purse, and many countries are looking for ways to reduce costs. One of the major issues is the relationship between health care and social care. This paper considers health care and social care as complements and substitutes through a household production framework. We demonstrate how health care and social care are attributes that are valued by individuals and how in the presence of a perfect market individuals would choose combinations of these attributes. We highlight how, even with technical efficiency, sub-optimal combinations of health and social care may be chosen. We also show, through the introduction of a new good, how there may be opportunities to alleviate the costs of the ageing population.

Suggested Citation

  • Wildman, John & McMeekin, Peter, 2014. "Health care and social care: complements, substitutes and attributes," MPRA Paper 54425, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:54425
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    File URL: https://mpra.ub.uni-muenchen.de/54425/1/MPRA_paper_54425.pdf
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    References listed on IDEAS

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    1. Les Mayhew & Martin Karlsson & Ben Rickayzen, 2010. "The Role of Private Finance in Paying for Long Term Care," Economic Journal, Royal Economic Society, vol. 120(548), pages 478-504, November.
    2. Jose-Luis Fernandez & Julien Forder, 2012. "Reforming Long-term Care Funding Arrangements in England: International Lessons," Applied Economic Perspectives and Policy, Agricultural and Applied Economics Association, vol. 34(2), pages 346-362.
    3. Robert E. Hall & Charles I. Jones, 2007. "The Value of Life and the Rise in Health Spending," The Quarterly Journal of Economics, Oxford University Press, vol. 122(1), pages 39-72.
    4. Grossman, Michael, 1972. "On the Concept of Health Capital and the Demand for Health," Journal of Political Economy, University of Chicago Press, vol. 80(2), pages 223-255, March-Apr.
    5. Peter Zweifel & Stefan Felder & Markus Meiers, 1999. "Ageing of population and health care expenditure: a red herring?," Health Economics, John Wiley & Sons, Ltd., vol. 8(6), pages 485-496.
    6. Baoping Shang & Dana Goldman, 2008. "Does age or life expectancy better predict health care expenditures?," Health Economics, John Wiley & Sons, Ltd., vol. 17(4), pages 487-501.
    7. Katharina Hauck & Rebecca Shaw & Peter C. Smith, 2002. "Reducing avoidable inequalities in health: a new criterion for setting health care capitation payments," Health Economics, John Wiley & Sons, Ltd., vol. 11(8), pages 667-677.
    8. Kelvin J. Lancaster, 1966. "A New Approach to Consumer Theory," Journal of Political Economy, University of Chicago Press, vol. 74, pages 132-132.
    9. Labelle, Roberta & Stoddart, Greg & Rice, Thomas, 1994. "A re-examination of the meaning and importance of supplier-induced demand," Journal of Health Economics, Elsevier, vol. 13(3), pages 347-368, October.
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    Cited by:

    1. Wildman, John & McMeekin, Peter & Grieve, Eleanor & Briggs, Andrew, 2016. "Economic evaluation of integrated new technologies for health and social care: Suggestions for policy makers, users and evaluators," Social Science & Medicine, Elsevier, vol. 169(C), pages 141-148.

    More about this item

    Keywords

    Ageing population; health production; attributes; complements and substitutes; market failure;

    JEL classification:

    • I1 - Health, Education, and Welfare - - Health
    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination

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