Health, Consumption and Inequality

By: Jose-Victor Rios-Rull (University of Pennsylvania) ; Josep Pijoan-Mas (CEMFI)
We use a stylized model of endogenous health choices to construct compensated variation measures of inequality between individuals in different education and wealth groups at age 50, taking into account differences in consumption, differences in health, and differences in mortality between types. In doing so, we allow for the more disadvantaged types to take actions to improve their health when given some extra income. We use a simple revealed preference argument to measure the health-improving technology with information on consumption, medical expenditure, and health transitions by different types. We find that inequality in education is much more damaging in welfare terms than education in wealth due to the larger differences in life expectancy by education groups than by wealth groups. Our estimates of health technology show that only a small fraction of life expectancy differences between individuals of different education can be imputed to differential medical expenditure after age 50.
URL: http://d.repec.org/n?u=RePEc:red:sed016:1235&r=ltv

 

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: