The production of health and the valuation of medical inputs in wage-amenity models

• Published in: Social science & medicine (1982) Vol. 50; no. 4; pp. 507 - 515
• Main Authors: Schumacher, Edward J., Whitehead, John C.
• Format: Journal Article
• Language: English
• Published: Oxford Elsevier Ltd 01-02-2000; Elsevier; Pergamon Press Inc
• Series: Social Science & Medicine
• Subjects: Amenity; Biological and medical sciences; Epidemiology; General aspects; Health; Health administration; Health care; Health economics; Health management; Health policy; Health production; Health services; Health Services Needs and Demand - economics; Health Services Needs and Demand - statistics & numerical data; Hedonic; Hedonic Amenity Health production Medical inputs; Humans; Income; Input; Medical inputs; Medical personnel; Medical profession; Medical sciences; Medical sociology; Medicine; Methodology; Models, Statistical; North Carolina; Production; Public health. Hygiene; Public health. Hygiene-occupational medicine; Relationship; U.S.A; USA; Valuation; Wage-Amenity models; Wages & salaries; North Carolina; United States; North America; America; Amenity; Health production; Medical inputs; Hedonic; Human; Evaluation; Choice; Methodology; Health staff; Health; Physician; Health service; Epidemiology; Models; Ratio; Public health; Geographical variation
• ISSN: 0277-9536; 1873-5347
• DOI: 10.1016/S0277-9536(99)00296-8

Using a hedonic wage-amenity model, this paper examines the valuation of medical inputs into the production of health. The data used in this study include the incomes, demographics and measures of human capital for households in eastern North Carolina with county level medical input supply. These data allow an estimate of the marginal value of medical care inputs such as the physician to population ratio and the availability of specialized services in an area of the country where the lack of available medical care has been of particular concern to policy makers. Our results indicate that while health care inputs are not a significant determinant of earnings overall, they are important in counties that have been designated as medically underserved. In underserved counties each additional physician per 10,000 individuals in the county decreases earnings by about 11.6%. This suggests that physicians act as an amenity and workers are willing to accept lower wages to locate in counties with a higher physician to population ratio.