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Evaluating the redistributive impact of public health expenditure using an insurance value approach
Amedeo Spadaro1, Lucia Mangiavacchi, Ignacio Moral-Arce
1Department of Applied Economics, University of the Balearic Islands, Cra Valldemossa km 7.5, 07122, Palma de Mallorca, Spain.
Abstract:
This article analyses the redistributive impact of public health expenditure in Spain using an insurance value approach to compute individual and household's value of health services non-cash benefit. We model the intensity of use of different health care services using a count data framework on a nationally representative health care survey and then predict probabilities on the 2006 Spanish EU-SILC sample. This allows us to extend disposable income with the expected monetary value of public health services and to compare it with strictly cash income. Since non-cash income due to public health services is associated with health needs, we use needs-adjusted equivalence scales to perform distributional analysis and poverty/inequality comparisons. The results show that public health expenditure in Spain acts progressively on income distribution, and that health in-kind benefits, once considered as part of disposable income, can be extremely effective in reducing poverty and inequality.
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