I'll try to respond to this when I have more time to do it right. But there
is something else I wanted to bring up from the International Health
Economics Association meeting.
There were several plenary and regular sessions focusing on the "Wilkinson
Hypothesis". That is to say the theory that there is a relationship between
macroeconomic measures of income inequality and average health status. This
relationship is above and beyond that expected by the "Prescott Curve," that
says there is a strong relationship between the level of individual income
and individual health. To make a long story short, the consensus at the
meeting both from those who had been advocates and detractors of the W
hypothesis in the past is that current data and/or sophisticated analysis
does not support the hypothesis for most situations examined - e.g. OECD
countries, within UK, within Canada, within Australia. The remaining, very
important case, is within the U.S. Some cross-sectional analyses of SMSA
data within the U.S. - notably by Michael Wolfson of Statistics Canada -
strongly support the hypothesis. The counter-argument, put forward by Angus
Deaton - an econometrician/development economist - is that when one enters
percent black population into the regression for the U.S. the coefficients
on the inequality measures drop out. This only happens if one looks
separately at health status (e.g. mortality) for blacks and whites
separately. And, note, white mortality is inversely related to percent
black population.
There was some discussion to the effect that macro measures of social
structure still matter but that things like Gini coefficients of measured
income were never very good measures. Some discussion about dysfunction
urban structures in the U.S. being the real issue, etc....but apart from
this what should we make of this debate??
1] All attempts a these kinds of ecological regression are not worth the
effort.
2] There is rationale for Deaton to substitute percent black for income
inequality.
3] Percent black is a proxy measure for something that really is important
- but what is it??
I will say this for health economics. 1] Would the questions of inequality
ever dominate a meeting of AEA? 2] Would everybody at an AEA meeting, even
those on the political right end of the debate, concede the importance of
the Prescott curve, say that economists have ignored this for far too long
and that we need to learn a lot more about the specific mechanisms behind
this statistical relationship and intervene with social programs to address
it? 3] Acknowledge that the Prescott Curve, alone, tells us that total
social welfare would/should be improved by transfering social resources
toward lower end of the income distribution (because 99% of health
economists have pretty much accepted the proposition that a additional unit
of health is/ought to be worth at least as much to a poor person as a rich
person).
On the down side, this debate has received the least visibility in the one
country where the evidence suggests that both the Prescott Curve and
(perhaps) the Wilkinson effects are the strongest - the US.
-----Original Message-----
From: Jim Devine [mailto:[EMAIL PROTECTED]]
Sent: Monday, August 20, 2001 12:35 PM
To: [EMAIL PROTECTED]
Subject: [PEN-L:16087] Re: Reducing Risk
Martin wrote:
>When I go to a meeting like the International Health Economics
>Association, it is only among the U.S. contigent ..., who feel it
>necessary that social criteria for making health resources allocation
>decisions must flow directly from "neoclassical foundations of welfare
>economics." There are lots of other creative, and empirically based
>approaches being advances that try to combine some meaningful mix of
>objective individual well-being, equity under fixed budget constraints and
>some measure of social preference that would emerge under a democratic
>process. No one claims to have the final answer and there is a lot of
>controversy and debate but the point is; no one except the U.S. NC find
>any reason that all discussion of social allocation must be bound to the
>NC paradigm ...
could you please give an example of a proposal that involves a "meaningful
mix of objective individual well-being, equity under fixed budget
constraints and some measure of social preference that would emerge under a
democratic process"?
Jim Devine [EMAIL PROTECTED] & http://bellarmine.lmu.edu/~jdevine
