Working paper 05/116 - Abstract

Why Economics is Good for Your Health. 2004 Royal Economic Society Public Lecture (PDF, file 108 KB) (PDF, 107kB)

Carol Propper

 In this paper, I examine the contribution that economics can make to our understanding of key issues in health and health care.
In the first part of the paper, I argue that economics can bring valuable insights into the world of over-eating and present recent economic theories that argue that the root cause of the increase in obesity lies in technological change. Technological change, in terms of the kind of work we do, the agricultural production revolution and the major cost reductions in food processing and distribution have all contributed to weight gain. This hypothesis is illustrated by data from the USA.
In the second part, I argue that understanding incentives is the key to understanding the behaviour of suppliers of health care, explaining for example, why health staff 'fiddle the figure' to meet government targets and why doctors will respond to financial payments.

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