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Using compensating variation to measure the costs of child disability in the UK

Melnychuk, M; Solmi, F; Morris, S; (2017) Using compensating variation to measure the costs of child disability in the UK. The European Journal of Health Economics , 19 (3) pp. 419-433. 10.1007/s10198-017-0893-7. Green open access

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Abstract

The objective of disability policy is to create a society where people with disabilities and their families enjoy an equal standard of living to those without disabilities, though evidence to underpin policy is sparse. We defined the compensating variation (CV) of child disability as the amount of additional income a family with a disabled child would require to achieve the same living standards as a similar family without a disabled child. The aims of this study were to estimate the CV for child disability and to explore how this varied for different levels of disability and reference levels of living standards. Using data on 54,641 families from the Family Resources Survey (2004–2012), we matched families with (cases) and without (controls) a disabled child on family and child characteristics plus living standards and calculated the income difference inclusive of disability benefits. Our findings suggest that across families with the most disabled children, a compensating variation equal to an extra £56–£79 a week was required to achieve the same living standards as matched families without a disabled child compared with the mean level of state disability benefit £47–£71 a week in this group.

Type: Article
Title: Using compensating variation to measure the costs of child disability in the UK
Open access status: An open access version is available from UCL Discovery
DOI: 10.1007/s10198-017-0893-7
Publisher version: http://dx.doi.org/10.1007/s10198-017-0893-7
Language: English
Additional information: © The Author(s) 2017. This article is distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution, and reproduction in any medium, provided you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license, and indicate if changes were made.
Keywords: Compensating variation; Child disability; Matching; Living standards
UCL classification: UCL > Provost and Vice Provost Offices
UCL > Provost and Vice Provost Offices > School of Life and Medical Sciences
UCL > Provost and Vice Provost Offices > School of Life and Medical Sciences > Faculty of Brain Sciences
UCL > Provost and Vice Provost Offices > School of Life and Medical Sciences > Faculty of Brain Sciences > Division of Psychiatry
UCL > Provost and Vice Provost Offices > School of Life and Medical Sciences > Faculty of Pop Health Sciences > Institute of Epidemiology and Health
UCL > Provost and Vice Provost Offices > School of Life and Medical Sciences > Faculty of Pop Health Sciences > Institute of Epidemiology and Health > Applied Health Research
URI: https://discovery.ucl.ac.uk/id/eprint/1551657
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