IDEAS home Printed from https://ideas.repec.org/a/wly/hlthec/v7y1998i8p701-710.html
   My bibliography  Save this article

Estimation of a multiproduct cost function for physically frail older people

Author

Listed:
  • Paul McNamee
  • Barbara A. Gregson
  • Ken Wright
  • Debbie Buck
  • Claire H. Bamford
  • John Bond

Abstract

Using the theory of multiproduct cost functions, this paper derives a cost function for physically frail older people living in private households, based on data collected between 1991 and 1995, for 472 subjects aged 65 years of age or over in four areas of England. The main characteristic of the cost function is that output categories are classified in terms of movements between different health states. These were measured by changes in activities of daily living (ADL) over 2 years, with ‘low’ ADL representing better functional ability than ‘high’ ADL. Empirical application of the approach, using four states defined in terms of worsening progression (stable low ADL; deteriorated or improved ADL; stable high ADL; deceased), indicated more favourable states were associated with lower costs. Multivariate analysis showed that the derived states were significantly related to costs which, when combined with variables indicating presence of particular chronic health conditions (diabetes or previous stroke), admission to continuing care accommodation and household structure, explained one‐fifth of the variation in log average costs per week. Variables such as age, sex, carer input, social networks and level of cognitive functioning had no independent impact on costs. These findings could be used as a starting point for those interested in predicting the cost implications associated with the ageing population.Copyright © 1998 John Wiley & Sons, Ltd.

Suggested Citation

  • Paul McNamee & Barbara A. Gregson & Ken Wright & Debbie Buck & Claire H. Bamford & John Bond, 1998. "Estimation of a multiproduct cost function for physically frail older people," Health Economics, John Wiley & Sons, Ltd., vol. 7(8), pages 701-710, December.
    • Handle: RePEc:wly:hlthec:v:7:y:1998:i:8:p:701-710
    DOI: 10.1002/(SICI)1099-1050(199812)7:8<701::AID-HEC382>3.0.CO;2-X
    as

    Download full text from publisher

    File URL: https://doi.org/10.1002/(SICI)1099-1050(199812)7:83.0.CO;2-X
    Download Restriction: no
    File URL: https://libkey.io/10.1002/(SICI)1099-1050(199812)7:8<701::AID-HEC382>3.0.CO;2-X?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Baumol, William J, 1982. "Contestable Markets: An Uprising in the Theory of Industry Structure," American Economic Review, American Economic Association, vol. 72(1), pages 1-15, March.
    2. Crets, Stefan, 1996. "Determinants of the use of ambulant social care by the elderly," Social Science & Medicine, Elsevier, vol. 43(12), pages 1709-1720, December.
    3. Butler, James R. G. & Furnival, Colin M. & Hart, Ruth F. G., 1995. "Estimating treatment cost functions for progressive diseases: A multiproduct approach with an application to breast cancer," Journal of Health Economics, Elsevier, vol. 14(3), pages 361-385, August.
    4. Halvorsen, Robert & Palmquist, Raymond, 1980. "The Interpretation of Dummy Variables in Semilogarithmic Equations," American Economic Review, American Economic Association, vol. 70(3), pages 474-475, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Christian Kronborg Andersen & Kjeld Andersen & Per Kragh‐Sørensen, 2000. "Cost function estimation: the choice of a model to apply to dementia," Health Economics, John Wiley & Sons, Ltd., vol. 9(5), pages 397-409, July.
    2. Christian Kronborg & Mikkel Vass & Jørgen Lauridsen & Kirsten Avlund, 2006. "Cost effectiveness of preventive home visits to the elderly," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 7(4), pages 238-246, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Federico Ciliberto & Jonathan W. Williams, 2010. "Limited Access to Airport Facilities and Market Power in the Airline Industry," Journal of Law and Economics, University of Chicago Press, vol. 53(3), pages 467-495.
    2. Bruttel, Oliver, 2005. "Die Privatisierung der öffentlichen Arbeitsvermittlung : Erfahrungen aus Australien, den Niederlanden und Großbritannien (The privatisation of public employment services * experiences made in Australi," Zeitschrift für ArbeitsmarktForschung - Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 38(1), pages 7-29.
    3. Jean-Marc Siroën, 1993. "Marchés contestables, différenciation des produits et discrimination des prix," Revue Économique, Programme National Persée, vol. 44(3), pages 569-592.
    4. Hailu, Getu & Weersink, Alfons & Minten, Bart J., 2015. "Rural Organizations, Agricultural Technologies and Production Efficiency of Teff in Ethiopia," 2015 Conference, August 9-14, 2015, Milan, Italy 211702, International Association of Agricultural Economists.
    5. Sen, Souvik & Ganguly, Sourav, 2017. "Opportunities, barriers and issues with renewable energy development – A discussion," Renewable and Sustainable Energy Reviews, Elsevier, vol. 69(C), pages 1170-1181.
    6. Peter Brusov & Tatiana Filatova & Natali Orekhova, 2023. "Capital Structure Theory: Past, Present, Future," Springer Books, in: The Brusov–Filatova–Orekhova Theory of Capital Structure, chapter 0, pages 9-50, Springer.
    7. Peter Kuhn, 1982. "Malfeasance in Long Term Employment Contracts: A New General Model with an Application to Unionism," NBER Working Papers 1045, National Bureau of Economic Research, Inc.
    8. Mazali, Rogério & Rodrigues-Neto, José A., 2013. "Dress to impress: Brands as status symbols," Games and Economic Behavior, Elsevier, vol. 82(C), pages 103-131.
    9. Shamsul Arifeen Khan Mamun, 2012. "Stochastic estimation of cost frontier: evidence from Bangladesh," Education Economics, Taylor & Francis Journals, vol. 20(2), pages 211-227, May.
    10. Kristin F. Butcher & Cecilia Elena Rouse, 2001. "Wage Effects of Unions and Industrial Councils in South Africa," ILR Review, Cornell University, ILR School, vol. 54(2), pages 349-374, January.
    11. Amit Ghosh, 2018. "What Drives Banking Industry Competition in Developing Countries?," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 43(4), pages 1-20, December.
    12. Bletschacher, Georg & Klodt, Henning, 1992. "Strategische Handels- und Industriepolitik: theoretische Grundlagen, Branchenanalysen und wettbewerbspolitische Implikationen," Open Access Publications from Kiel Institute for the World Economy 456, Kiel Institute for the World Economy (IfW Kiel).
    13. Burton, John & Hanlon, Pat, 1994. "Airline alliances: cooperating to compete?," Journal of Air Transport Management, Elsevier, vol. 1(4), pages 209-227.
    14. Makoto Yano, 2005. "Coexistence of large firms and less efficient small firms under price competition with free entry," International Journal of Economic Theory, The International Society for Economic Theory, vol. 1(3), pages 167-188.
    15. Sharunina, A., 2016. "Where Do Public Workers Live Well? Public-Private Wage Gaps in Russia's Regions," Journal of the New Economic Association, New Economic Association, vol. 30(2), pages 105-128.
    16. Néstor Duch-Brown & Martí Parellada-Sabata & Jose Polo-Otero, 2010. "Economies of scale and scope of university research and technology transfer: a flexible multi-product approach," Working Papers 2010/51, Institut d'Economia de Barcelona (IEB).
    17. W. Walls, 2005. "Modeling Movie Success When ‘Nobody Knows Anything’: Conditional Stable-Distribution Analysis Of Film Returns," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 29(3), pages 177-190, August.
    18. Rabah Amir, "undated". "Market Structure, Scale Economies and Industry Performance," CIE Discussion Papers 2000-03, University of Copenhagen. Department of Economics. Centre for Industrial Economics.
    19. Falk, Martin & Vanat, Laurent, 2016. "Gains from investments in snowmaking facilities," Ecological Economics, Elsevier, vol. 130(C), pages 339-349.
    20. Sinay, Tony, 2005. "Cost structure of osteopathic hospitals and their local counterparts in the USA: Are they any different?," Social Science & Medicine, Elsevier, vol. 60(8), pages 1805-1814, April.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wly:hlthec:v:7:y:1998:i:8:p:701-710. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www3.interscience.wiley.com/cgi-bin/jhome/5749 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.