UNDERSTANDING CROSS-COUNTRY DIFFERENCES IN HEALTH STATUS AND EXPENDITURES

Raquel Fonseca (1, 2) , François Langot (3, 4) , Pierre-Carl Michaud (5, 6) , Thepthida Sopraseuth (7)

1 UQAM - Université du Québec à Montréal = University of Québec in Montréal
2 CIRANO - Centre interuniversitaire de recherche en analyse des organisations
3 UM - Le Mans Université
4 PSE - Paris School of Economics
5 HEC Montréal - HEC Montréal
6 NBER - National Bureau of Economic Research [New York]
7 THEMA - Théorie économique, modélisation et applications

Using a general equilibrium heterogeneous agent model featuring health production, we quantify the relative contribution of price distortions in the health market, TFP and other health risks in explaining cross-country differences in health expenditure (as a share of GDP) and health status. Estimated parameters reveal a substantial price wedge that explains at most 20% of the difference in health spending (as a share of GDP) and 30% of the difference in health status between Europe and the U.S. We estimate a one percentage point negative impact on the life-time cost-of-living of Americans from higher prices due to inefficiencies.

Domains: Humanities and Social Sciences; Economics and Finance

Raquel Fonseca, François Langot, Pierre-Carl Michaud, Thepthida Sopraseuth. UNDERSTANDING CROSS-COUNTRY DIFFERENCES IN HEALTH STATUS AND EXPENDITURES. 2022. ⟨hal-03679009⟩