Health, Welfare and Inequality

Gabriella Berloffa, Agar Brugiavini and Dino Rizzi

No 2006_41, Working Papers from Department of Economics, University of Venice "Ca' Foscari"

Abstract: This paper uses data from the Health and Retirement Study (HRS) to study the relationship between health status and economic welfare at household level. We develop a model to estimate the welfare cost of ill health by exploiting the methodology of the equivalence scales. The crucial variables in this approach are, besides the health status (measured in several dimensions), the economic decisions of the household which can be directly related to health conditions, such as health-related expenses. By estimating a demand system we derive health-equivalence scales to learn about the cost of health conditions on economic welfare, controlling for other covariates. Our estimates suggest that � when taking account of health � the welfare of households in poor health drops substantially and inequality increases. There are important social welfare costs associated with differences in the health status of the elderly in the USA.

Keywords: welfare cost; health; inequality (search for similar items in EconPapers)
JEL-codes: I12 I31 J14 (search for similar items in EconPapers)
Pages: 32 pages
Date: 2006
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:ven:wpaper:2006_41

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