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Issues overview


MacKellar, Landis (2004). Issues overview.. MacKellar, Landis; Andriouchina, Elena; & Horlacher, David (Eds.) (pp. 11-27). Laxenberg, Austria: International Institute for Applied Systems Analysis.


While this note, and workshop, focus on Russia, it is important to place Russia’s current health situation in a long-run perspective. Five important stylized facts emerge from the large econometric literature regarding health and long-run economic development.
1. In international cross-section, there is an inverse correlation between per capita income and major health indicators such as infant mortality, maternal mortality, and life expectancy. In a nutshell, “Wealthier is healthier.” To give an example of this, Figure 1 plots the natural log of maternal mortality rate (MMR, per 100,000 live births) against the natural log of gross domestic product (GDP) per capita and draws a trend line.
2. Maternal mortality is a more robust health index than infant mortality and, while it is not so comprehensive as life expectancy at birth, it is arguably more easily interpretable. The estimated elasticity of –0.86 should not be taken too seriously, for there reasons. • The income figures used are not the so-called “purchasing power parity” (PPP) figures that provide the most accurate picture of comparative international incomes.
3. •Simple correlations overstate causal links when there is bi-directional causality (i.e., if health makes wealth in addition to wealth making health). In this case, then the trend lines drawn in Figures 1 and 2 will be too steep.
•We make no attempt to control for “third factors,” which might cause both higher income and better health, such as literacy. In other words, the inverse relationships in Figures 1 and 2 may be, in part, artifacts of other, unexplored causal relationships. Studies correcting for these three problems, however, verify that there is a true causal link between higher income and better health (as well as in the opposite direction).

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MacKellar, Landis