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Income Redistribution and Access to Innovations in Health Care


  • Maria del Carmen García-Alonso


  • Owen O'Donnell


We study the impact a redistribution of income has on the decisions of a health care innovator and the utility of consumers. We find that income redistribution from rich to poor increases the quality of the medical innovation, reduces its price and increases the utility of some of the consumers whose income is reduced through the redistribution.

Suggested Citation

  • Maria del Carmen García-Alonso & Owen O'Donnell, 2001. "Income Redistribution and Access to Innovations in Health Care," Studies in Economics 0111, School of Economics, University of Kent.
  • Handle: RePEc:ukc:ukcedp:0111

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    References listed on IDEAS

    1. Michael Kremer, 2001. "Creating Markets for New Vaccines - Part II: Design Issues," NBER Chapters,in: Innovation Policy and the Economy, Volume 1, pages 73-118 National Bureau of Economic Research, Inc.
    2. Avner Shaked & John Sutton, 1982. "Relaxing Price Competition Through Product Differentiation," Review of Economic Studies, Oxford University Press, vol. 49(1), pages 3-13.
    3. Michael Kremer, 2001. "Creating Markets for New Vaccines - Part I: Rationale," NBER Chapters,in: Innovation Policy and the Economy, Volume 1, pages 35-72 National Bureau of Economic Research, Inc.
    4. Jaskold Gabszewicz, J. & Thisse, J. -F., 1979. "Price competition, quality and income disparities," Journal of Economic Theory, Elsevier, vol. 20(3), pages 340-359, June.
    5. Goddeeris, John H, 1984. "Medical Insurance, Technological Change, and Welfare," Economic Inquiry, Western Economic Association International, vol. 22(1), pages 56-67, January.
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    More about this item


    Health care; Innovation; Income Redistribution;

    JEL classification:

    • D4 - Microeconomics - - Market Structure, Pricing, and Design
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • I1 - Health, Education, and Welfare - - Health

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