Disability specific equivalence scales: a case-control approach applied to the cost of acquired brain injuries

This study estimates the household costs resulting from acquired brain injuries in terms of a reduction in the standard of living. The application uses primary data collected in the Verona and Florence provinces of Italy integrating highly detailed health information with information about consumption, income, wealth, time-use and relational well-being describing the standard of living. In general, the estimates of disability costs in previous studies are obtained from survey data without a specific focus on individuals with disabilities but collect information on the general health status. In contrast, this study exploits highly detailed information on a sample of "cases" with a disability, whose intensity is measured by the highly precise European quality of life measure-5 domain-5 (EQ-5D) instrument, to be compared with a sample of "control" formed by households without disabled members. The disability scales have been estimated using a Structural Equation Modelling (SEM) based procedure. We then implement interpersonal comparisons on the health income dimension in a theoretically plausible way, testing the independence hypothesis of equivalence scales. Our study finds that on average disabled households need an additional amount of about €1800 per month to reach the same standard of livings as the non-disabled households corresponding to a scale of 1.78.