NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH
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Understanding Cross-country Differences in Health Status and Expenditures

Raquel Fonseca, François Langot, Pierre-Carl Michaud, Thepthida Sopraseuth

NBER Working Paper No. 26876
Issued in March 2020
NBER Program(s):Economics of Aging

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.

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Document Object Identifier (DOI): 10.3386/w26876

 
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