The estimation of the health functioning production function for brazil
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The Estimation of the Health Functioning Production Function for Brazil. Paola Salardi [email protected] The Motivation of this Research.

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The Estimation of the Health Functioning Production Function for Brazil

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The estimation of the health functioning production function for brazil

The Estimation of the Health Functioning Production Function for Brazil

Paola [email protected]

Paola Salardi, The Estimation of the Health Functioning Production Function for Brazil, Oxford 2009 Conference “New Directions in Welfare”, 29 June – 1 July


The motivation of this research

The Motivation of this Research

  • Little has been done to deepen the analysis of functionings-resources conversion process from both the theoretical and empirical perspectives in the context of the capability approach.

  • Understanding the functionings-resources conversion process might be a valuable tool for the policy maker. The policy maker might be interested in how individuals convert their resources into achieved functionings.

Paola Salardi, The Estimation of the Health Functioning Production Function for Brazil, Oxford 2009 Conference “New Directions in Welfare”, 29 June – 1 July


The aim of the paper

The Aim of the Paper

To estimate the health functioning production function for Brazil in order to assess differences in ability of individuals to achieve good health outcomes.

  • The healthfunctioning production functiondefines the relation between the achievementof the functioning “beinghealthy” and a set of private and public resourcescontrollingfor a set ofexogenouscharacteristics.

  • functioning-resourcesconversionprocess

  • conversionfactors

  • conversionrates

Paola Salardi, The Estimation of the Health Functioning Production Function for Brazil, Oxford 2009 Conference “New Directions in Welfare”, 29 June – 1 July


The structure of the presentation

The Structure of the Presentation

  • Literature review

  • The economic framework

  • Data and variables description

  • Empirical findings

  • Policy implications

  • Further steps

Paola Salardi, The Estimation of the Health Functioning Production Function for Brazil, Oxford 2009 Conference “New Directions in Welfare”, 29 June – 1 July


Literature review i

Literature review (I)

  • Health economics literature:

    • Demand for health and the HH health production function: Grossman (1972), Rosenzweig and Schultz (1983), Schultz (1984);

    • Impact of socio-economic determinants of health: Thomas, Lavy and Strauss (1996), Lavi et al (1996), Rivera (2001), Zhao and Bishai (2003), Mohindra, Haddad and Narayana (2006, 2008);

    • Specifically on Brazil: Thomas, Strauss and Henriques (1990, 1991), Sastry (1996), Kassouf and Sanauer (1996);

    • Socio-economic gradient: Marmot and Shilpey (1996), Case (2000) Deaton (1999, 2000), Hildebrand and van Kerm (2005), Foster and Ray (2006), Li and Zhu (2006).

Paola Salardi, The Estimation of the Health Functioning Production Function for Brazil, Oxford 2009 Conference “New Directions in Welfare”, 29 June – 1 July


Literature review ii

Literature review (II)

  • Capability approach literature:

    • Health as part of a multidimensional concept of well-being: Anand (2004), Nussbaum (2000), Anand (2005), Anand, Hunter and Smith (2005), Anand et al (2006);

    • Health and disability: Zaidi and Burchardt (2005), Mitra (2006), Jones and Mitra (2006);

    • Operationalization of CA in estimating well-being: Sen (1985), Robeyns (2003, 2005), Robeyns and Kuklys (2004);

    • Estimating health in the context of the CA: Kuklys (2005), Martin (2006), Destefanis and Sena (2006), Chiappero-Martinetti and Salardi (2009).

Paola Salardi, The Estimation of the Health Functioning Production Function for Brazil, Oxford 2009 Conference “New Directions in Welfare”, 29 June – 1 July


The economic framework i

The Economic Framework (I)

  • The “utilizationfunction” introducedby Sen (1985)

  • Kuklys’s (2005) noveltyof the inclusionofconversionfactors in the analyticalformulationof the conversionprocess

  • Chiappero, Grasso and Pareglio (2007) offer a more complexframeworkwherewell-beingisgeneratedbyboth private and public resources.

  • WefollowKuklys in stressing the importanceofconversionfactorsbutour ultimate interest is in assessing the ratesofconversionforboth private and public resourcesthatprevailafter accounting forthesedifferentconversionfactors.

Paola Salardi, The Estimation of the Health Functioning Production Function for Brazil, Oxford 2009 Conference “New Directions in Welfare”, 29 June – 1 July


The economic framework ii

The Economic Framework (II)

The health functioning production function is given by

Hij is the achievement of the health functioning for person i living in the geographical area j

Wij is the wealth index

Gj is the index for public goods and services

zij are internal conversion factors

zj are external conversion factors

Paola Salardi, The Estimation of the Health Functioning Production Function for Brazil, Oxford 2009 Conference “New Directions in Welfare”, 29 June – 1 July


Data and variables description i

Data and Variables Description (I)

  • The annual Brazilian households survey, Pesquisa Nacional por Amostra do Domicilios (PNAD), for 2003 collected by the Instituto Brasileiro de Geografia e Estatistica (IBGE).

  • This Brazilian household survey has been integrated with regional data on public health services coming from the so-called Datasus dataset provided by the Brazilian Minister of Health.

Paola Salardi, The Estimation of the Health Functioning Production Function for Brazil, Oxford 2009 Conference “New Directions in Welfare”, 29 June – 1 July


Data and variables description ii

Data and Variables Description (II)

  • Dependent variables:

    - SMRI (self-reported morbidity index)

    - SHSI (subjective health status indicator)

  • Resources:

    - wealth indicator (proxy for private resources)

    - public resources index

  • Conversion factors:

    - personal characteristics (gender, age,

    ethnicity, education)

    - labour market characteristics (farmer, occupational levels, formal sector)

    - geographical characteristics (macro-regions, urban, Brasilia, São Paulo, Roraima, Acre)

Paola Salardi, The Estimation of the Health Functioning Production Function for Brazil, Oxford 2009 Conference “New Directions in Welfare”, 29 June – 1 July


Data and variables description iii figure 1 the incidence of srmi and shsi

Data and Variables Description (III)FIGURE 1. The incidence of SRMI and SHSI

Paola Salardi, The Estimation of the Health Functioning Production Function for Brazil, Oxford 2009 Conference “New Directions in Welfare”, 29 June – 1 July


Empirical findings i table v marginal effects of probit estimates using srmi

Empirical findings (I)TABLE V. Marginal effects of Probit estimates using SRMI

Paola Salardi, The Estimation of the Health Functioning Production Function for Brazil, Oxford 2009 Conference “New Directions in Welfare”, 29 June – 1 July


Empirical findings ii table vi ordered probit estimates using shsi

Empirical findings (II)TABLE VI. Ordered probit estimates using SHSI

Paola Salardi, The Estimation of the Health Functioning Production Function for Brazil, Oxford 2009 Conference “New Directions in Welfare”, 29 June – 1 July


Empirical findings iii table vii marginal effects of probit estimates using srmi by gender and race

Empirical findings (III)TABLE VII. Marginal effects of Probit estimates using SRMI by gender and race

Paola Salardi, The Estimation of the Health Functioning Production Function for Brazil, Oxford 2009 Conference “New Directions in Welfare”, 29 June – 1 July


Empirical findings iv table viii ordered probit estimates using shsi by gender and race

Empirical findings (IV)TABLE VIII. Ordered probit estimates using SHSI by gender and race

Paola Salardi, The Estimation of the Health Functioning Production Function for Brazil, Oxford 2009 Conference “New Directions in Welfare”, 29 June – 1 July


Empirical findings v

Empirical findings (V)

Considering the entire population:

  • By identifying the health functioning with SRMI, public resources are more crucial than private wealth, while the reverse is true for SHSI.

  • Private and public resources are complementary in the conversion process.

    By looking at the population groups by gender and race:

  • The rate of conversion for private resources for white men is on average higher than other groups;

  • The rate of conversion for public resources for white individuals is on average smaller than for non-whites;

  • Women show on average a greater ability to convert public resources than men.

Paola Salardi, The Estimation of the Health Functioning Production Function for Brazil, Oxford 2009 Conference “New Directions in Welfare”, 29 June – 1 July


Policy implications

Policy implications

By revealing the differences in conversion rates across groups this paper highlights the importance of targeted policies instead of universal policies.

  • why is it that certain groups have higher conversion rates for particular resources, and how can the conversion rates of other groups be improved?

  • recognizing that different groups benefit differentially from different resources, which resources should be the focus of government attention?

    The Brazilian policy maker should be interested in understanding why non-white individuals have the highest conversion rates in using public resources.

    Recognizing the heavy reliance of women on public services, the public health services might wish to create more female-centric policies to most efficiently improve health functioning.

Paola Salardi, The Estimation of the Health Functioning Production Function for Brazil, Oxford 2009 Conference “New Directions in Welfare”, 29 June – 1 July


Further steps

Further steps

  • Need of more statistical data in order to better define functionings

  • Further investigation on the type of resources considered in the model

  • Introduction of additional conversion factors: problem with the omitted variables

  • Improvement of the econometric strategies: whether IV estimation procedure is able to control for the endogeneity problem and whether or not there are valid instruments

Paola Salardi, The Estimation of the Health Functioning Production Function for Brazil, Oxford 2009 Conference “New Directions in Welfare”, 29 June – 1 July


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