Altruism, Efficiency, and Health in the Family

Abstract

Purpose

The chapter investigates: (1) Do married parents efficiently allocate time to children’s health care? (2) Are parents willing to sacrifice consumption for health improvements at an equal rate for all family members? (3) How does family structure affect health trade-offs parents make? (4) Are parental choices consistent with maximization of a single utility function?

Methodology

A model is specified focusing on how parents allocate resources between consumption and goods that relieve acute illnesses for family members. Equivalent surplus functions measuring parental willingness to pay to relieve acute illnesses are estimated using data from a stated-preference survey.

Findings

Results provide limited support for the prediction that married parents allocate time to child health care according to comparative advantage. Valuations of avoided illness vary between family members and are inconsistent with the hypothesis that fathers’ and mothers’ choices reflect a common utility function.

Research implications

Prior research on children’s health valuation has relied on a unitary framework that is rejected here. Valuation researchers have focused on allocation of resources between parents and children while ignoring allocation of resources among children, whereas results suggest significant heterogeneity in valuation of health of different types of children and of children in different types of households.

Social implications

Results may provide a justification on efficiency grounds for policies to provide special protection for children’s health and suggest that benefit–cost analyses of policies affecting health should include separate estimates of the benefits of health improvements for children and adults.

Citation

Dickie, M. and Salois, M.J. (2014), "Altruism, Efficiency, and Health in the Family", Preference Measurement in Health (Advances in Health Economics and Health Services Research, Vol. 24), Emerald Group Publishing Limited, Leeds, pp. 1-92. https://doi.org/10.1108/S0731-219920140000024000