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- Title
An institutional and evolutionary perspective on health economics.
- Authors
Hodgson, Geoffrey M.
- Abstract
Neoclassical theoretical approaches dominate modern health economics. However, the peculiarities of healthcare provision are so unusual that neoclassical theory is especially unsuited to the area. Even mainstream health economists often abandon Paretian welfare considerations to focus on needs instead. Problems relating to uncertainty and externalities are also widely acknowledged. This article shows that there are additional important pecularities of healthcare that are relatively neglected in the literature. Some of these concern healthcare needs: while health itself is a universal need, needs for healthcare provision are largely involuntary, varied and idiosyncratic. These issues have important consequences for the planning of healthcare systems and the extent of transaction costs in any market-based system. These factors, combined with the inherent dynamism of modern healthcare needs and capabilities, make institutional and evolutionary approaches especially suitable for healthcare economics.
- Subjects
NEOCLASSICAL school of economics; ECONOMICS; ECONOMICS &; literature; EXTERNALITIES; PUBLIC health; CRITICAL realism; CRITICAL thinking; MODERN philosophy; SOCIAL sciences
- Publication
Cambridge Journal of Economics, 2008, Vol 32, Issue 2, p235
- ISSN
0309-166X
- Publication type
Article
- DOI
10.1093/cje/bem033