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Irving Fisher and the Contribution of Improved Longevity to Living Standards

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  • William D. Nordhaus

Abstract

It is not widely recognized that conventional measures of national income and output exclude the value of improvements in the health status of the population. The present study discusses the theory of the measurement of national income, proposes a new concept called “health income” that can be used to incorporate improvements in health status, and applies the theory to data for the United States over the 20th century. It concludes that accounting for improvements in the health status would, over the twentieth century in the United States, make a substantial difference to our measures of economic welfare.

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  • William D. Nordhaus, 2005. "Irving Fisher and the Contribution of Improved Longevity to Living Standards," American Journal of Economics and Sociology, Wiley Blackwell, vol. 64(1), pages 367-392, January.
    • Handle: RePEc:bla:ajecsc:v:64:y:2005:i:1:p:367-392
    DOI: 10.1111/j.1536-7150.2005.00367.x
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    References listed on IDEAS

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    Cited by:

    1. Lichtenberg, Frank R., 2022. "The effect of pharmaceutical innovation on longevity: Evidence from the U.S. and 26 high-income countries," Economics & Human Biology, Elsevier, vol. 46(C).
    2. Benjamin F. Jones & Lawrence H. Summers, 2020. "A Calculation of the Social Returns to Innovation," NBER Chapters, in: Innovation and Public Policy, pages 13-59, National Bureau of Economic Research, Inc.
    3. Hickson, Kerry, 2012. "The Untold Standards of Living Story: The GDP value of Twentieth Century Health Improvements in Developed Economies," CAGE Online Working Paper Series 105, Competitive Advantage in the Global Economy (CAGE).
    4. Frank R. Lichtenberg, 2017. "The Impact of Pharmaceutical Innovation on Premature Mortality, Hospital Separations, and Cancer Survival in Australia," The Economic Record, The Economic Society of Australia, vol. 93(302), pages 353-378, September.
    5. Frank R. Lichtenberg, 2017. "How Cost-Effective Are New Cancer Drugs in the U.S.?," CESifo Working Paper Series 6683, CESifo Group Munich.
    6. Frank R. LICHTENBERG, 2018. "The Impact of New Drug Launch on Life-Years Lost in 2015 from 19 Types of Cancer in 36 Countries," JODE - Journal of Demographic Economics, Cambridge University Press, vol. 84(3), pages 309-354, September.
    7. Joseph J. Doyle, 2011. "Returns to Local-Area Health Care Spending: Evidence from Health Shocks to Patients Far from Home," American Economic Journal: Applied Economics, American Economic Association, vol. 3(3), pages 221-243, July.
    8. Philip Lawn, 2014. "Measuring sustainable economic welfare," Chapters, in: Giles Atkinson & Simon Dietz & Eric Neumayer & Matthew Agarwala (ed.), Handbook of Sustainable Development, chapter 23, pages 348-370, Edward Elgar Publishing.
    9. Pretnar, Nick, 2020. "The Intergenerational Welfare Implications of Disease Contagion," MPRA Paper 101862, University Library of Munich, Germany, revised 14 Jul 2020.
    10. Frank R. Lichtenberg, 2018. "The Impact of Public and Private Research on Premature Cancer Mortality and Hospitalization in the United States, 1999-2013," The American Economist, Sage Publications, vol. 63(2), pages 147-165, October.
    11. Frank R. Lichtenberg, 2019. "How Many Life-Years Have New Drugs Saved? A 3-Way Fixed-Effects Analysis of 66 Diseases in 27 Countries, 2000-2013," NBER Working Papers 25483, National Bureau of Economic Research, Inc.
    12. Brennan, Andrew John, 2013. "A critique of the perceived solid conceptual foundations of ISEW & GPI — Irving Fisher's cognisance of human-health capital in ‘net psychic income’," Ecological Economics, Elsevier, vol. 88(C), pages 159-166.
    13. Lawn, Philip, 2013. "The failure of the ISEW and GPI to fully account for changes in human-health capital — A methodological shortcoming not a theoretical weakness," Ecological Economics, Elsevier, vol. 88(C), pages 167-177.
    14. Rexford E. Santerre & James I. Hilliard, 2009. "The Health Economy and Health Insurance Research in the JRI," Risk Management and Insurance Review, American Risk and Insurance Association, vol. 12(1), pages 67-79, March.
    15. Kerry Hickson, 2014. "The GDP Value of Twentieth-Century Health Improvements in Developed Economies: Initial Estimates for England," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 60(2), pages 385-399, June.

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