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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," Cahiers de recherche / Working Papers 2004, Chaire de recherche sur les enjeux économiques intergénérationnels / Research Chair in Intergenerational Economics.
  • Handle: RePEc:rsi:creeic:2004
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    Cited by:

    1. Giorgio Fabbri & Marie-Louise Leroux & Paolo Melindi-Ghidi & Willem Sas, 2022. "Conditioning public pensions on health: effects on capital accumulation and welfare," Working Papers 2022-05, Grenoble Applied Economics Laboratory (GAEL).
    2. Giorgio Fabbri & Marie-Louise Leroux & Paolo Melindi-Ghidi & Willem Sas, 2022. "Conditioning public pensions on health: effects on capital accumulation and welfare," Working Papers 2022-05, Grenoble Applied Economics Laboratory (GAEL).

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    More about this item

    Keywords

    Health production; health status; heterogeneous agent model; price indices.;
    All these keywords.

    JEL classification:

    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • I10 - Health, Education, and Welfare - - Health - - - General
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty

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