Working Paper: NBER ID: w26876
Authors: Raquel Fonseca; Franois Langot; Pierre-Carl Michaud; Thepthida Sopraseuth
Abstract: Using a general equilibrium heterogeneous agent model featuring health production, we quantify the contribution of health price in explaining cross-country differences in health expenditures and health status. Considering other country-specific explanatory factors, U.S. health prices are estimated to be 33% higher than those of European countries. This price differential explains more than 60% of the difference in health expenditures and more than half of the difference in health status between Europe and the U.S. Despite its large impact at the aggregate level, these price differences increase the lifetime cost of living of Americans by two percentage points.
Keywords: health expenditures; health status; cross-country differences; general equilibrium model; health prices
JEL Codes: E21; H51; I10
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Health prices (I11) | Health expenditures (H51) |
| Health prices (I11) | Health status (I14) |
| U.S. health prices (H51) | Difference in health expenditures (H51) |
| U.S. health prices (H51) | Difference in health status (I14) |
| Health prices (I11) | Lifetime cost of living (J17) |
| Health prices (I11) | Gap in health expenditures (H51) |
| Health prices (I11) | Gap in healthy individuals (I12) |
| Health expenditures (H51) | Health status (I14) |