Incorporating Inequality Aversion in Health-Care Priority Setting

27 Pages Posted: 21 Feb 2019

See all articles by Joan Costa-Font

Joan Costa-Font

London School of Economics & Political Science (LSE)

Frank Cowell

London School of Economics & Political Science (LSE) - Suntory and Toyota International Centres for Economics and Related Disciplines (STICERD)

Date Written: 2019

Abstract

Although measures of sensitivity to inequality are important in judging the welfare effects of health-care programmes, it is far from straightforward how to elicit them and apply them in health-care decision making. This paper provides an overview of the literature on the measurement of inequality aversion, examines some of the features specific of the health domain that depart from the income domain, and discusses its implementation in health system priority-setting decisions. We find evidence that individuals exhibit a preference for more equitable health distribution, but inequality aversion estimates from the literature are unclear. Unlike the income-inequality literature, standard approaches in the health-economics do not follow a ‘veil-of-ignorance’ approach and elicit mostly bivariate (income-related health) inequality aversion estimates. We suggest some ideas to reduce the disconnect between the income-inequality and health-economics literatures.

Keywords: attitudes to inequality, inequality aversion, health, income, survey data, priority setting

JEL Classification: I190

Suggested Citation

Costa-Font, Joan and Cowell, Frank A., Incorporating Inequality Aversion in Health-Care Priority Setting (2019). CESifo Working Paper No. 7503. Available at SSRN: https://ssrn.com/abstract=3338860

Joan Costa-Font (Contact Author)

London School of Economics & Political Science (LSE) ( email )

Houghton Street
London, WC2A 2AE
United Kingdom

HOME PAGE: http://https://joancostaifont.org/

Frank A. Cowell

London School of Economics & Political Science (LSE) - Suntory and Toyota International Centres for Economics and Related Disciplines (STICERD) ( email )

Houghton Street
London WC2A 2AE
United Kingdom
+44 (0)171-955 7277 (Phone)
+44 (0)171-242 2357 (Fax)

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