Modelling opportunity in health under partial observability of circumstances

Rosa Dias, Pedro (2010) Modelling opportunity in health under partial observability of circumstances. Health Economics, 19 (3). pp. 252-264. ISSN 1057-9230

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Abstract

This paper proposes a behavioural model of inequality of opportunity in health that integrates John Roemer’s framework of inequality of opportunity with the Grossman model of health capital and demand for health.
The model generates a recursive system of equations for health and lifestyles, which is then jointly estimated by full information maximum likelihood with freely correlated error terms. The analysis innovates by accounting
for the presence of unobserved heterogeneity, therefore addressing the partial-circumstance problem, and by extending the examination of inequality of opportunity to health outcomes other than self-assessed
health, such as long-standing illness, disability and mental health. The results provide evidence for the existence of third factors that simultaneously influence health outcomes and lifestyle choices, supporting the empirical
relevance of the partial-circumstance problem. Accounting for these factors, the paper corroborates that the effect of parental and early circumstances on adult health disparities is paramount. However, the particular set of
circumstances that affect each of the analysed health outcomes differs substantially. The results also show that differences in educational opportunities, and in social development in childhood, are crucial determinants of lifestyles in adulthood, which, in turn, shape the observed health inequalities.

Item Type: Article
Keywords: equality of opportunity; childhood conditions; lifestyles; NCDS
Schools and Departments: School of Business, Management and Economics > Economics
Subjects: H Social Sciences > HB Economic theory. Demography > HB0131 Methodology > HB0135 Mathematical economics. Quantitative methods Including econometrics, input-output analysis, game theory
Depositing User: Pedro Rosa Dias
Date Deposited: 07 Nov 2012 15:05
Last Modified: 07 Mar 2017 11:37
URI: http://sro.sussex.ac.uk/id/eprint/41387

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