THE APPROPRIATE EMPIRICAL MEASUREMENT OF HEALTH STATUS
Abstract
The present paper presents a methodological essay demonstrating how a person’s health status can be ascertained empirically from the types of survey data available to economists. The main econometric problem is that health status is a latent variable, neither directly observable nor directly measurable. Analysts attempt to deal with this problem by using health proxies such as mortality rates or morbidity measures including days-in-bed, work-loss-days, etc. The method introduced in this essay extends the concept of morbidity measures by conceptualizing health status in terms of illness. Illness itself can be measured by a real number that represents illness severity. Empirically, actual diagnostic conditions, symptoms, as well as the limiting and debilitating effects of illness are incorporated in a multiple-indicators-multiple-causes (MIMIC) structural equation model of the latent variable, severity-of-illness. A hindering problem in Nigeria is the non-availability of appropriate data. For that reason, this paper uses data from the United States National Medical Care Utilization and Expenditures Survey to illustrate the method. Another version of this empirical study is published in Eze and Uwakwe (2015).References
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Arrow, K. (1963) “Uncertainty and the Welfare Economics of Medical Care,” American Economic Review 53. 941 – 973.
Dardanoni, V. and A. Wagstaff (1987) “Uncertainty, Inequalities in Health and the Demand for Health,” Journal of Health Economics 6. 283 – 290.
Duan, N., W. Manning, C. Morris and J. Newhouse (1984) “Choosing Between the Sample-Selection Model and Multipart Model,” Journal of Business and Economic Statistics 2 #3 283-289.
Eneji, M., D. Juliana and B. Omabe (2013) “Health care expenditure, health status and national productivity in Nigeria (1999-2012)” Journal of Economics and International Finance vol.5 # 7 258-272.
Eze, P. (1991) A Model of Demand for Medical Care. Doctoral Dissertation submitted to the Graduate School of the University of Wisconsin-Madison in partial fulfilment of the requirements for the degree of Doctor of Philosophy (Economics).
Eze, P. (2013) “An Economic Concept of the Severity of Illness”. GOU Journal of Management and Social Sciences, vol.1 #1.
Eze, P. and Q. Uwakwe (2015)
Eze, P. and B. Wolfe (1993) “Is Dumping Socially Efficient?” Journal of Public Economics 52. 329 – 344.
Grossman, M. (1972) “On the Concept of Health Capital and the Demand for Health,” Journal of Political Economy 80. 223 – 255.
Haveman, R., M. Stone and B. Wolfe (1989), “Market Work, Wages, and Men’s Health,” NBER Working Paper #2020. National Bureau of Economic Research, Inc.
Hensher, D. And F. Milthorpe (1987) “Selectivity Correction in Discrete-Continuous Choice Analysis: With Empirical Evidence for Vehicle Choice and Use,” Regional Science and Urban Economics.
Horn, S. and P. Sharkey (1983), “Measuring Severity of Illness to Predict Resource Use Within DRGs,” Inquiry 20. 314 – 321.
Jöreskog, K. and A. Goldberger (September 1975) “Estimation of a Model with Multiple Indicators and Multiple Causes of a Single Latent Variable,” Journal of the American Statistical Association 70. 631 – 639.
Jöreskog, K. and D. Sörbom (1989) LISREL 7: A Guide to the Program and Applications. Chicago: SPSS Inc. (2nd ed.).
Kiiskinen, U. (2002) A Health Production Approach to the Economic Analysis of Health Promotion. Academic Dissertation for the Degree of Doctor of Philosophy. Department of Economics & Related Studies. University of York, United Kingdom.
Lillard, L., W. Manning, C. Peterson, N. Lurie, G. Goldberg and C. Phelps (1986) “Preventive Medical Care: Standards, Usage, and Efficacy,” R-3266-HCFA, Santa Monica: Rand.
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Olaniyan, O. and A. Lawanson (2010) “Health Expenditure and Health Status in Northern and Southern Nigeria: A Comparative Analysis Using NHA Framework1” Paper presented at the 2010 CSAE conference held at St Catherine College, University of Oxford, Oxford, UK. 1-18.
Onisanwa, I. (2014) “The Impact of Health on Economic Growth in Nigeria,” Journal of Economics and Sustainable Development. vol.5 #19. 159-166.
Pauly, M. (1980) Doctors and Their Workshop: Economic Models of Physician Behaviour. Chicago: National Bureau of Economic Research.
Phelps, C. (2013) Health Economics (5th edition). Pearson, Inc., Boston.
Phelps, C. and J. Newhouse (1974) Coinsurance and the Demand for Medical Services. R-964-1-OEO/NC. Rand Corporation.
Riman, H. And E. Akpan (2012) Healthcare Financing and Health Outcomes in Nigeria: A State-level study using Multivariate Analysis. International Journal of Humanities and Social Science. Vol.2 #15. 296 – 309.
van de Ven, W. and J. van der Gaag (1982) “Health as an Unobservable: A MIMIC-Model of Demand for Health Care,” Journal of Health Economics 1. 157 – 183.
van de Ven, W. and B. van Praag (1981) “Risk-aversion and Deductibles in Private Health Insurance: Application of an Adjusted Tobit Model to Family Health Care Expenditures,” in J. van der Gaag and M. Perlman (eds.) Health, Economics, and Health Economics. Amsterdam: North Holland Publishing Company. 125 – 148.
Wagstaff, A. (1986) The Demand for Health: Some New Empirical Evidence. Journal of Health Economics 5, 195—233.
Wedig, G. (1988) “Health Status and the Demand for Health: Results on Price Elasticities,” Journal of Health Economics 7. 151 – 163.
Weisbrob, B. (1991) “The Heakth Care Quadrilemma: An Essay on Technological Change, Insurance, Quality of Care, and Cost Containment,” Journal of Economic Literature 29, 523 – 552.
Williams, A. (1981) “Welfare Economics and Health Status,” in J. Va der Gaag and M. Perlman (eds.) Health, Economics, and Health Economics Amsterdam: North Holland Publishing Company. 271 – 281.
Wolfe, B. And J. van der Gaag (1981) “A New Health Status Index for Children,” in J. Va der Gaag and M. Perlman (eds.) Health, Economics, and Health Economics. Amsterdam: North Holland Publishing Company. 283 – 304.
Yaqub, J., T. Ojapinwa and R. Yussuff (2012) “Public Health Expenditure and Health Outcome in Nigeria: The Impact of Governance” European Scientific Journal, vol. 8 #13 189-201.
Aigner, D., C. Hsiao, A. Kapteyn and T. Wansbeek (1984) “Latent Variable Models in Econometrics,” in Z. Griliches and M. Intriligator (editors) Handbook of Econometrics volume 2, Chapter 25. Amsterdam: North-Holland Publishing Company. 1321-1393.
Arrow, K. (1963) “Uncertainty and the Welfare Economics of Medical Care,” American Economic Review 53. 941 – 973.
Dardanoni, V. and A. Wagstaff (1987) “Uncertainty, Inequalities in Health and the Demand for Health,” Journal of Health Economics 6. 283 – 290.
Duan, N., W. Manning, C. Morris and J. Newhouse (1984) “Choosing Between the Sample-Selection Model and Multipart Model,” Journal of Business and Economic Statistics 2 #3 283-289.
Eneji, M., D. Juliana and B. Omabe (2013) “Health care expenditure, health status and national productivity in Nigeria (1999-2012)” Journal of Economics and International Finance vol.5 # 7 258-272.
Eze, P. (1991) A Model of Demand for Medical Care. Doctoral Dissertation submitted to the Graduate School of the University of Wisconsin-Madison in partial fulfilment of the requirements for the degree of Doctor of Philosophy (Economics).
Eze, P. (2013) “An Economic Concept of the Severity of Illness”. GOU Journal of Management and Social Sciences, vol.1 #1.
Eze, P. and Q. Uwakwe (2015)
Eze, P. and B. Wolfe (1993) “Is Dumping Socially Efficient?” Journal of Public Economics 52. 329 – 344.
Grossman, M. (1972) “On the Concept of Health Capital and the Demand for Health,” Journal of Political Economy 80. 223 – 255.
Haveman, R., M. Stone and B. Wolfe (1989), “Market Work, Wages, and Men’s Health,” NBER Working Paper #2020. National Bureau of Economic Research, Inc.
Hensher, D. And F. Milthorpe (1987) “Selectivity Correction in Discrete-Continuous Choice Analysis: With Empirical Evidence for Vehicle Choice and Use,” Regional Science and Urban Economics.
Horn, S. and P. Sharkey (1983), “Measuring Severity of Illness to Predict Resource Use Within DRGs,” Inquiry 20. 314 – 321.
Jöreskog, K. and A. Goldberger (September 1975) “Estimation of a Model with Multiple Indicators and Multiple Causes of a Single Latent Variable,” Journal of the American Statistical Association 70. 631 – 639.
Jöreskog, K. and D. Sörbom (1989) LISREL 7: A Guide to the Program and Applications. Chicago: SPSS Inc. (2nd ed.).
Kiiskinen, U. (2002) A Health Production Approach to the Economic Analysis of Health Promotion. Academic Dissertation for the Degree of Doctor of Philosophy. Department of Economics & Related Studies. University of York, United Kingdom.
Lillard, L., W. Manning, C. Peterson, N. Lurie, G. Goldberg and C. Phelps (1986) “Preventive Medical Care: Standards, Usage, and Efficacy,” R-3266-HCFA, Santa Monica: Rand.
Manning, W., J. Newhouse, N. Duan, E. Keeler, A. Leibowitz and M. Marquis (1987) “Health Insurance and the Demand for medical Care: Evidence from a Randomized Experiment,” American Economic Review 77 #3. 251-277.
Olaniyan, O. and A. Lawanson (2010) “Health Expenditure and Health Status in Northern and Southern Nigeria: A Comparative Analysis Using NHA Framework1” Paper presented at the 2010 CSAE conference held at St Catherine College, University of Oxford, Oxford, UK. 1-18.
Onisanwa, I. (2014) “The Impact of Health on Economic Growth in Nigeria,” Journal of Economics and Sustainable Development. vol.5 #19. 159-166.
Pauly, M. (1980) Doctors and Their Workshop: Economic Models of Physician Behaviour. Chicago: National Bureau of Economic Research.
Phelps, C. (2013) Health Economics (5th edition). Pearson, Inc., Boston.
Phelps, C. and J. Newhouse (1974) Coinsurance and the Demand for Medical Services. R-964-1-OEO/NC. Rand Corporation.
Riman, H. And E. Akpan (2012) Healthcare Financing and Health Outcomes in Nigeria: A State-level study using Multivariate Analysis. International Journal of Humanities and Social Science. Vol.2 #15. 296 – 309.
van de Ven, W. and J. van der Gaag (1982) “Health as an Unobservable: A MIMIC-Model of Demand for Health Care,” Journal of Health Economics 1. 157 – 183.
van de Ven, W. and B. van Praag (1981) “Risk-aversion and Deductibles in Private Health Insurance: Application of an Adjusted Tobit Model to Family Health Care Expenditures,” in J. van der Gaag and M. Perlman (eds.) Health, Economics, and Health Economics. Amsterdam: North Holland Publishing Company. 125 – 148.
Wagstaff, A. (1986) The Demand for Health: Some New Empirical Evidence. Journal of Health Economics 5, 195—233.
Wedig, G. (1988) “Health Status and the Demand for Health: Results on Price Elasticities,” Journal of Health Economics 7. 151 – 163.
Weisbrob, B. (1991) “The Heakth Care Quadrilemma: An Essay on Technological Change, Insurance, Quality of Care, and Cost Containment,” Journal of Economic Literature 29, 523 – 552.
Williams, A. (1981) “Welfare Economics and Health Status,” in J. Va der Gaag and M. Perlman (eds.) Health, Economics, and Health Economics Amsterdam: North Holland Publishing Company. 271 – 281.
Wolfe, B. And J. van der Gaag (1981) “A New Health Status Index for Children,” in J. Va der Gaag and M. Perlman (eds.) Health, Economics, and Health Economics. Amsterdam: North Holland Publishing Company. 283 – 304.
Yaqub, J., T. Ojapinwa and R. Yussuff (2012) “Public Health Expenditure and Health Outcome in Nigeria: The Impact of Governance” European Scientific Journal, vol. 8 #13 189-201.
Published
2017-02-16
How to Cite
EZE, Pius C.
THE APPROPRIATE EMPIRICAL MEASUREMENT OF HEALTH STATUS.
GOUNI Journal of Management and Social Sciences, [S.l.], v. 4, n. 2, p. 157-162, feb. 2017.
ISSN 2550-7265. Available at: <http://journal.gouni.edu.ng/index.php/fmss/article/view/20>. Date accessed: 10 may 2018.
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Section
Articles
Keywords
Empirical Measurement; Health Status
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