Health, Welfare and Inequality

33 Pages Posted: 30 Nov 2006

See all articles by Gabriella Berloffa

Gabriella Berloffa

University of Trento - Department of Economics and Management

Agar Brugiavini

Ca Foscari University of Venice - Dipartimento di Economia

Dino Rizzi

Ca Foscari University of Venice - Dipartimento di Economia

Date Written: October 2006

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 healthequivalence 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

JEL Classification: I12, I31, J14

Suggested Citation

Berloffa, Gabriella and Brugiavini, Agar and Rizzi, Dino, Health, Welfare and Inequality (October 2006). University Ca' Foscari of Venice, Dept. of Economics Research Paper Series No. 41/06, Available at SSRN: https://ssrn.com/abstract=948376 or http://dx.doi.org/10.2139/ssrn.948376

Gabriella Berloffa (Contact Author)

University of Trento - Department of Economics and Management ( email )

Via Inama 5
Trento, I-38100
Italy

Agar Brugiavini

Ca Foscari University of Venice - Dipartimento di Economia ( email )

Cannaregio 873
Venice, 30121
Italy

Dino Rizzi

Ca Foscari University of Venice - Dipartimento di Economia ( email )

Cannaregio 873
Venice, 30121
Italy

HOME PAGE: http://www.unive.it/persone/rizzid

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