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Measuring income-related inequalities in risky health prospects

Author

Listed:
  • Gustav Kjellsson

    () (University of Gothenburg)

  • Dennis Petrie

    () (Monash University)

  • Tom (T.G.M.) van Ourti

    () (Erasmus University Rotterdam; Tinbergen Institute, The Netherlands)

Abstract

The measurement of health disparities is a key component for the assessment of health systems. One aspect of these disparities – which hitherto has received limited attention – is the risk people face about their future health. This paper integrates risk into the standard inequality measurement which measures the extent to which disparities in realized health are systematically associated with income. It develops a rank dependent inequality index that considers not only inequalities in expected future health but also the dispersion of individuals’ future health prospects. It is useful when a social planner wants to account for risk averse preferences in the assessment of income-related health inequalities. The empirical application using Australian longitudinal data highlights that neglecting risk underestimates income-related health inequalities since the poor were not only expected to be in worse health in the future, but also faced greater dispersion in their future health prospects compared to the rich.

Suggested Citation

  • Gustav Kjellsson & Dennis Petrie & Tom (T.G.M.) van Ourti, 2018. "Measuring income-related inequalities in risky health prospects," Tinbergen Institute Discussion Papers 18-007/V, Tinbergen Institute.
  • Handle: RePEc:tin:wpaper:20180007
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    File URL: https://papers.tinbergen.nl/18007.pdf
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    More about this item

    Keywords

    health inequality; risk; concentration index;

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • I10 - Health, Education, and Welfare - - Health - - - General

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