Economics

Question 1

cost-of-illness def

Answer 1

translation of harmful effects of poor health into financial terms
- Scale of the economic burden of disease
- Limitation of cost of illness approach: failure to address causality, perfect health is unrealistic

Question 2

micro-economic perspective def

Answer 2

level of household/individual/firm

Question 3

channels of health status that contribute to economics

Answer 3

• labor productivity
• labor supply
• education
• savings

Question 4

labor productivity

Answer 4

wages and earnings as indicator of productivity
- Poor health is associated with lower earnings
- It is hard to access health-related data. That is why people use BMI/weight (higher BMI=lower earning) or height (greater height is associated with health in childhood –> positive impact on earnings)

Question 5

labor supply

Answer 5

employment, hours worked, probability of retiring from labour force
- Illness in family affects not only employees but also household members
- Sick spouse:
- Men reduce their work/ exit labour force
- Women continue to work

Question 6

education

Answer 6

better health in childhood –> better cognitive development, reduced school absenteeism and early drop-outs
- Bad health conditions in childhood –> impaired cognitive function (low IQ)
- Health < – > education (interdependent)

Question 7

savings

Answer 7

healthier individuals might save more (retirement or invest in physical capital)
- Reduction in wealth through illness is not just because of medical costs but also due to spending pattern based on anticipated life span

Question 8

macro-economic perspective

Answer 8

differences between countries or worldwide
- Large parts of todays economic wealth in high-income countries is because of achievements in health
- About 50% of economic growth in the UK between 1780 and 1980 can be attributed too improved nutrition and health
- Reduction of cardiovascular mortality by 10% associated with an increase in the growth of per capita income by 1 percentage point

Question 9

value of statistical life def

Answer 9

principle economic parameter that governs the attractiveness of effort to reduce the mortality risk
- It does not measure value of life but the population’s willingness to pay to reduce risk or enhance safety
- If the value was infinite, we would have to spend an infinite amount of money.

Question 10

willingness to accept

Answer 10

what is the compensation needed to accept small increases in risk

Question 11

willingness to pay

Answer 11

the amount that people are willing to pay for risk reduction