The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

Health Economics

  • Barbara Wolfe
Reference work entry


Health care expenditures form an ever-increasing burden in most developed countries, especially the United States, where they accounted for 16.0 per cent of GDP in 2004, up from 5.1 per cent of GDP in 1960. These cost increases alone suggest that health economics is a dynamic field of economic research, but the importance and the interest of the field are driven by broader considerations. This article delineates important market failures and research issues in health and health care, the relationship between income and health, methodological issues in the measurement of health, and quality issues in the measurement of health care.


Absolute deprivation–health hypothesis Income–health hypotheses Adverse selection Asymmetric information Crowding out Deadweight loss Diffusion of technology Disability, economics of Gradient effects Health capital Health economics Health insurance Health maintenance organizations (HMOs) Hospital economics Managed competition Market failures in health care Medicaid (USA) Medical practice licensing Medicare (USA) Moral hazard Mortality Non-profit organizations Nutrition Payroll tax Pharmaceutical industry RAND Health Insurance Experiment Tax expenditures Well-being 

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Thanks to Rashi Fein, Robert Haveman, John Mullahy, Nathan Tefft and Jason Fletcher for helpful suggestions.


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© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • Barbara Wolfe
    • 1
  1. 1.