Distribution of Health Costs

  • Burden by personal characteristics
  • Burden by socioeconomic status
  • Burden by insurance coverage

Analysis

  • Adjusting income to account for family/household size. Dividing by the square-root of the household size is the most commonly used case of the economies of scale size-adjustments proposed by Buhmann, et al. (1988) where size-adjusted income = total income /size^α, with α=1 implying no economies of scale (per capita income) and α=0 implying infinite economies of scale (the implicit assumption of those who do not adjust for size). Dividing by the square root of household size (α=0.5) closely matches the adjustments for household size implied by official Census Bureau poverty thresholds (Ruggles 1990). Source: Footnote 8 in Burkhauser, Larrimore and Simon (2012).

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