Improving Welfare: The Value of Health
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Health Is a Major Determinant of Welfare The relationship between health and welfare can be explored both directly, because health is closely connected to well-being, and indirectly, because better health may lead to a higher income and thus to the consumption of other goods that also matter for welfare. In this section, we begin with a focus on the direct impact, as it is the more important channel for motivating policies aimed at improving health outcomes. The health-income nexus, or investment value of health, is discussed briefly later in the section.
Health and Human Rights, Human Development, and Happiness A common approach for asserting the importance of health is to state that it is a basic human “right.” This view is affirmed in Article 25 of the Universal Declaration of Human Rights (1948). It is also expressed, in various ways, in the constitution of the World Health Organization (1946), the Alma-Ata Declaration on primary health care (1978), and Article 11 of the European Social Charter (1961). A commitment to health as a right—and sometimes explicitly as free access to medical care—is also enshrined in many national constitutions in the ECA region (Gotsadze and Gaal 2010). These documents put on paper what most people take as self-evident: that there is little more fundamental to our existence than our personal health. Good health has also been closely associated with the very concept of “development.” A prominent conceptual approach to human development has emphasized capabilities—in the simplest terms, focusing on what a person is able to do—and argued that development fundamentally entails overcoming capability deprivation (Sen 1985, 1999). In this sense, development is seen as a much broader process than just escaping from income poverty. As a means of expanding a person’s capabilities, better physical and mental health plays an important role in this narrative. This notion contributed to the creation of the original United Nations (UN) Human Development Index, in which life expectancy featured as one of the four indicators. Another rationale for affirming the importance of health can be drawn from the literature on “happiness.” This research usually involves opinion surveys to identify the factors that contribute to a person’s self-reported well-being. While there are debates about measurement, causality, and policy implications, here we simply note that these studies unsurprisingly show a strong relationship between health and happiness. In fact, it is often more statistically
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