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Disability Costs and Equivalence Scales in the Older Population in Great Britain

Morciano, M and Hancock, R and Pudney, S (2014) 'Disability Costs and Equivalence Scales in the Older Population in Great Britain.' Review of Income and Wealth. ISSN 0034-6586

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Abstract

We use a standard of living (SoL) approach to estimate older people's disability costs, using data on 8000 individuals from the U.K. Family Resources Survey. We extend previous research in two ways. First, by allowing for a more flexible relationship between SoL and income, the structure of the estimated disability cost and equivalence scale is not dictated by a restrictive functional form assumption. Second, we allow for the latent nature of disability and SoL, addressing measurement error in the disability and SoL indicators in surveys. We find that disability costs are strongly related to severity of disability, and vary with income in absolute and proportionate terms. Older people above the median disability level require an extra �99 per week (2007 prices) on average to reach the SoL of an otherwise similar person at the median. Costs faced by older people in the highest decile of disability average �180.

Item Type: Article
Uncontrolled Keywords: costs of disability; disability indexes; equivalence scale; standard of living; structural equation modeling
Subjects: H Social Sciences > H Social Sciences (General)
Divisions: Faculty of Social Sciences > Institute for Social and Economic Research
Depositing User: Jim Jamieson
Date Deposited: 04 Feb 2014 10:13
Last Modified: 17 Aug 2017 17:54
URI: http://repository.essex.ac.uk/id/eprint/8716

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