Auster, Richard, Irving Leveson, and Deborah Sarachek. 1969. "The Production of Health, an Exploratory Study." Journal of Human Resources 4(4):411-436.

The relationship of mortality of whites to both medical care and environmental variables is examined in a regression analysis across states in 1960. Medical care is alternatively measured by expenditures and by the output of a Cobb-Douglas production function combining the services of physicians, paramedical personnel, capital, and drugs. Simultaneous equation bias resulting from the influence of factor supply curves and demand for medical care is dealt with by estimating a more complete model. Both two-stage least squares and ordinary least squares estimates are presented.

The elasticity of the age-adjusted death rate with respect to medical services is about -0.1. Environmental variables are far more important than medical care. High education is associated with relatively low death rates. High Income, however, is associated with high mortality when medical care and education are controlled for. This may reflect unfavorable diets, lack of exercise, psychological tensions, etc. The positive association of mortality with income may explain the failure of death rates to decline rapidly in recent years. Adverse factors associated with the growth of income may be nullifying beneficial effects of increases in the quantity and quality of care. If so, the view that we have reached a biological limit to the death rate is not valid.

Richard Auster is an Assistant Professor, City College of the City University of New York. Irving Leveson is Chief Research Specialist, Office of Comprehensive Planning, New York City Department of City Planning. Deborah Sarachek is testing her local postnatal care facilities. The research was done under the auspices of the National Bureau of Economic Research "Productivity in the Service Industries" project, financed by a grant from the Ford Foundation; the "Health" project, financed by a grant from the Commonwealth Fund; with a grant of computer time from IBM Corporation. The authors wish to express thanks to Victor R. Fuchs for his encouragement and support as well as for his extensive comments and suggestions. Without his pioneering work, this study would not have been possible. Also appreciated is the assistance rendered in the form of comments and criticisms by Gary Becker, Philip Enterline, Michael Grossman, Reuben Gronau, Herbert Klarman, Sidney Leveson, John Meyer, Robert Michael, Jacob Mincer, David O'Neill, Melvin Reder, and Morris Silver. Finally, thanks are due to Robin Ringler, Ira Silver, Lorraine Wolch, and especially Henrietta Lichtenbaum for research assistance.

All appendices referred to and additional tables are available from the authors upon request.

© 2003 by the Board of Regents of the University of Wisconsin System

US ISSN 0022-166X

Return to JHR Home Page