RM 497 Moran E2 With 100% Verified Solutions!!
Need to understand contribution of various factors (medical care, health insurance,
lifestyle, the environment, etc.) to formulate
health policy
the first steps in deciding a total benefit vs Marginal benefit can be illustrated in the
production function of
H=f(M,L,E)
-H, is some measure of health (lifespan, annual sick days, infant mortality), and the
inputs are:
-M, medical care, measured in terms of expenditures or utilization
-L, lifestyle variables, e.g. the amount of smoking, drinking, or unhealthy eating
- E, the environment, e.g. the amount of various types of pollutionLook at the effect of
medical care, holding other factors constan
what property does this production function Illustrate (determinants of health)
The law of diminishing returns (MP is falling).
- consistent with most empirical evidence
-Reconciles the fact that the total benefit of medical care is large (e.g. 91 units at
$501B), while the marginal benefit is small (only gain 1 additional unit of health from the
last $1B spent)
, what is most relevant for policy analysis? (DofH)
The marginal product measures the gain from spending an additional billion on health
care, given our current level of spending.
the past had Improvements in mortality / lifespan due primarily to factors other than
medical care prior to 1900 (and perhaps even later) such as
-Public health measures (clean water, quarantines)
-Improved knowledge of disease (avoid contagious disease)
-Improvements in nutrition / availability of food (improved resistance to disease)
There were dramatic declines in death rates from infectious disease prior to the
existence of
effective medical treatments
Medical care might have larger benefits if other improvements in health were
considered such as
in illness, disability, pain
even small reductions in mortality may have
high value to people
"Best guess" estimate of the elasticity of life expectancy with respect to health
Need to understand contribution of various factors (medical care, health insurance,
lifestyle, the environment, etc.) to formulate
health policy
the first steps in deciding a total benefit vs Marginal benefit can be illustrated in the
production function of
H=f(M,L,E)
-H, is some measure of health (lifespan, annual sick days, infant mortality), and the
inputs are:
-M, medical care, measured in terms of expenditures or utilization
-L, lifestyle variables, e.g. the amount of smoking, drinking, or unhealthy eating
- E, the environment, e.g. the amount of various types of pollutionLook at the effect of
medical care, holding other factors constan
what property does this production function Illustrate (determinants of health)
The law of diminishing returns (MP is falling).
- consistent with most empirical evidence
-Reconciles the fact that the total benefit of medical care is large (e.g. 91 units at
$501B), while the marginal benefit is small (only gain 1 additional unit of health from the
last $1B spent)
, what is most relevant for policy analysis? (DofH)
The marginal product measures the gain from spending an additional billion on health
care, given our current level of spending.
the past had Improvements in mortality / lifespan due primarily to factors other than
medical care prior to 1900 (and perhaps even later) such as
-Public health measures (clean water, quarantines)
-Improved knowledge of disease (avoid contagious disease)
-Improvements in nutrition / availability of food (improved resistance to disease)
There were dramatic declines in death rates from infectious disease prior to the
existence of
effective medical treatments
Medical care might have larger benefits if other improvements in health were
considered such as
in illness, disability, pain
even small reductions in mortality may have
high value to people
"Best guess" estimate of the elasticity of life expectancy with respect to health
