The GDP Value of Twentieth-Century Health Improvements in Developed Economies: Initial Estimates for England

Authors


  • Note: I would like to thank Nick Crafts for all his help, Tim Leunig for his generous and invaluable support with this article, and as ever, Frank Hickson. Thanks also to two very helpful anonymous referees. Financial support from the Economic and Social Research Council and the British Academy is gratefully acknowledged.

Abstract

Economists are aware that conventional measures of national income do not capture everything that is important to individuals. In particular, the value of huge improvements in health over the twentieth century has gone uncalculated. Usher and Nordhaus have emphasized the virtues of including mortality improvements in some form of extended national income measure. This article therefore sets out a methodology that can be used to calculate the value of mortality and morbidity improvements. The results for England indicate that the value of health improvements in developed economies have added at least 0.3 percent per annum to twentieth-century GDP growth rates. The results demonstrate that those interested in understanding improvements in economic welfare need to pay much more attention to improvements in health.

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