Benefit-incidence analysis: are government health expenditures more pro-rich than we think?
Article first published online: 10 MAR 2011
Copyright © 2011 John Wiley & Sons, Ltd.
Volume 21, Issue 4, pages 351–366, April 2012
How to Cite
Wagstaff, A. (2012), Benefit-incidence analysis: are government health expenditures more pro-rich than we think?. Health Econ., 21: 351–366. doi: 10.1002/hec.1727
- Issue published online: 1 MAR 2012
- Article first published online: 10 MAR 2011
- Manuscript Accepted: 1 FEB 2011
- Manuscript Revised: 14 JAN 2011
- Manuscript Received: 6 FEB 2010
- benefit-incidence analysis;
- government health spending;
- pro-poor health spending
Authors of benefit-incidence analyses (BIA) have to impute subsidies using assumptions about the relationship between unobserved subsidies ‘captured’ by the household and what can be observed at the household and aggregate levels. This paper shows that one of the two assumptions used in BIA studies to date will necessarily produce a more pro-rich (or less pro-poor) picture of government health spending than the other, depending on whether utilization is more pro-rich or pro-poor than fees paid to public providers. Both assumptions have their disadvantages, and the paper suggests a couple of alternatives that explicitly link fees paid to the costliness of care. It shows that in the most likely case where fees are distributed in a more pro-rich fashion than utilization, the two traditional assumptions will produce less pro-rich distributions of subsidies than the two new alternatives. Also considered are three complications that arise in BIA studies, including factoring in social health insurance. The paper's theoretical results are illustrated with an empirical BIA for Vietnam. Copyright © 2011 John Wiley & Sons, Ltd.