Thursday, January 21, 2010

Does Better Health Increase Incomes?

The Economist has a nice article on the relationship between health and income. There is a positive relationship (correlation) between better health and higher incomes; but the question is does health or income affect the other. Some researchers find that better health decreases income, since better health leads to higher population and thus with fixed capital and natural resources will lead to lower per person income. Other researchers find that better health leads to more productivity, and thus greater incomes.

Since it is hard to show that increased health leads to quick increases in income (which would be the benefits of providing better health care to low income populations), we need to be careful about how we measure the benefits of better health care, especially when undertaking cost-benefit analysis of various health care products and procedures.

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