Health economics and applications in developing countries

The concept of health human capital guides the statistical study of (1) health production functions, (2) derived demands for medical and behavioral health inputs, and (3) determinants of health and productivity outcomes. Health inputs are generally endogenous to health outcomes, and prices of health inputs are the most common instrumental variable for identifying estimates of the causal effects of health inputs. But when health input prices are modified by individual regional migration, the regional prices no longer satisfy the requirement of being independent of preferences and omitted variables. Then the difficulty of evaluating health program effects reinforces the need to design randomized regional treatments, in order to be able to evaluate without bias the consequences of critical health interventions, such as are needed today to deal with the HIV/AIDS epidemic. (C) 2004 Elsevier B.V. All rights reserved.