Is more health always better?

Aki Tsuchiya

Dept of Economics and

School of Health and Related Research

Inaugural lecture 13 June 2012

outline

• Microeconomics for non-economists

• Application to health

• How I got here

PART ONE

Microeconomics

• The relationship between consumption goods and their effects on welfare

– Individual utility– Social welfare

0 Food

• Abstraction

• Quantification.

0 Food

Water

0 Food

• More food and more water is better than less food and less water

• Everything else is fixed.

Water

0 Food

Water

0 Food

• Collection of points that are equally good

A “contour” of utility or welfare

• Suppose there is less food

How much water would you need to make up for it?.

Water

0 Food

Water

0 Food

• The gradient of the contour along it

• “Substitutes”?.

Water

0 Food

Water

0 Food

• The contour is curved towards the origin

• The more of one good you already have, the less valuable is the next unit, relative to the other good.

Water

0 Food

Water

0 Food

“Pareto improvement”

If there is more of one good

and everything else is unchanged

then overall that is an improvement

The contour cannot be upward sloping.

Water

0 Food

Water

0 Food

• Too much of a “good” can be bad for you

• But rational individuals would not choose such a point

So the contour will not be upward sloping.

• The same analytical tool can be used for

– individual utility or social welfare,

– based on goods or services.

HC2

0 HC1

– or, social welfare, based on wellbeing of different people.

PART TWO

Health economics

• Application of microeconomics to health.

Health2

0 Health1

• Abstraction

• Quantification

• The grouping of people..

Health2

0 Health1

• Substitutes

• Suppose 1’s health declines

the same improvement in 2’s health would make up for it

…?

• More health is good

• Equality in health is also good– Why?.

Health2 Health1 = Health2

0 Health1

• The relationship between

efficiency and equality

“Inequality averse contour”.

Health2 H1=H2

0 Health1

Health2 H1=H2

0 Health1

Health2 H1=H2

0 Health1

Health2 H1=H2

0 Health1

• Equality is important

• Willingness to forego overall good• Quantification of the importance of equality.

Health2 H1=H2

0 Health1

• Pareto improvement

If there is more of one good

and everything else is unchanged,

then overall that is an improvement

The contour cannot be upward sloping.

• Pareto improvement

If the already healthy get even more healthy

and everything else is unchanged,

then overall that is an improvement

The contour cannot be upward sloping

….?.

Health2 H1=H2

0 Health1

Health2

Health2

Health2

Health2

Health2 Health2

Health2 H1=H2

0 Health1

• Shouldn’t social welfare be higher when both parties are better off?

• Can social welfare improve when both parties are worse off?

• Maybe, if inequalities are high enough.

Health2 H1=H2

0 Health1

Do people think

more health is always better?

Study country sample mode Sample size

% support upward slop.cont.

ESRC1 UK Public Interview 66 20%

IEF1 Spain Public Interview 973 57%

ESRC2 UK Public Postal 271 10%

HTA UK Public Groups 25 16%

Kaiser USA Policy holders Postal 784 14%

SDO UK NHS staff Postal 626 13%

IEF2-1 Spain Public Interview 327 51%

IEF2-2 Spain Public Interview 341 61%

Microeconomics, health economics, and health inequalities

• Quantification of the good• Conceptualisation of the contour• Quantification of the efficiency equality

trade off• How serious are we about inequalities?.

PART THREE

Me.

How I got here• BA in law & politics (Kyoto)• BA in ethics & philosophy (Kyoto)• MA in ethics & philosophy (Kyoto)• MA in economics (Kyoto)• PhD in health economics (Kyoto)• Post-doc in health economics (York)• ScHARR since 2000 (Sheffield)• ScHARR + Economics since 2005.

Joint appointment

• Faculty of Medicine Dentistry and Health– School of Health and Related Research

(ScHARR) • Health Economics and Decision Science (HEDS)

– Health Economics group

– March to August

• Faculty of Social Sciences– Department of Economics – September to February.

What I have being doing

• Valuation of health• Societal value of health• Quantification of aversion to inequalities in

health.

What I want to do

• Valuation of health • Societal value of health • Quantification of aversion to inequalities in

health

What I want to do

• Valuation of health and well-being• Societal value of health and well-being• Quantification of aversion to inequalities in

health and well-being

What I want to do

• Valuation of health and well-being• Societal value of health and well-being• Quantification of aversion to inequalities in

health and well-being• Contrasting aversion to inequality and risk.

A few thanks

• Colleagues at ScHARR - SHEG, HEDS• Colleagues at Dept Economics

• Professor Soshichi Uchii• Professor Shuzo Nishimura• Professor Alan Williams

• My parents and partner.

• And thanks to you.