The Subjective Costs of Health Losses due to Chronic Diseases: An Alternative Model Appraisal

Ada Ferrer-i-Carbonell and Bernard van Praag

No 313, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: This paper proposes a method to evaluate health losses or gains by looking at the impact on well-being of a change in health status. The paper presents estimates of the equivalent income change that would be necessary to change general satisfaction with life to the same extent as a change in health satisfaction would do. In other words, we estimate the income equivalent of health changes. Next, the health satisfaction changes are linked to specific diseases in order to estimate the income equivalent for various diseases. This method uses answers to well-being and health satisfaction questions as posed in a large German data set. We distinguish between workers and non-workers and between inhabitants of East- and West- Germany. We find, for instance, that for West-workers hearing impediments are on average equivalent to an income reduction of about 20%, and that heart blood difficulties are for the same group equivalent to a 47% income reduction.

Keywords: health damages; Chronic diseases; equivalent income; well-being; health satisfaction (search for similar items in EconPapers)
JEL-codes: I10 I12 (search for similar items in EconPapers)
Pages: 48 pages
Date: 2001-06
New Economics Papers: this item is included in nep-hea
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Published - published in: Health Economics, 2002, 11 (8), 709 - 722

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