Use consumption not income and the descrepency largely goes away. See https://www.google.co.uk/amp/s/randomcriticalanalysis.com/2016/09/25/high-us-health-care-spending-is-quite-well-explained-by-its-high-material-standard-of-living/amp/ … by @RCAFDM
Luxury good model does not seem to explain the high US spending on healthcare. Ignoring Luxembourg and Ireland (tax haven), there's a nice line for increase in GDP to increased %GDP spent on healthcare, but US is way above that line. https://www.healthsystemtracker.org/chart-collection/health-spending-u-s-compare-countries/#item-relative-size-wealth-u-s-spends-disproportionate-amount-health …pic.twitter.com/ZRNuNrzOk5
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It's also not just consumption. Adjusted disposable income of households paints a very similar picture.pic.twitter.com/1mxn2QLA4L
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(Y is health as share of AHDI)
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I'm going to be dropping a huge blog post on this topic soon BTW
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Can't wait!
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Ok, I just clicked publish. I should probably have proofread it more, but I wanted to wrap this up before Thanksgivinghttps://randomcriticalanalysis.com/2018/11/19/why-everything-you-know-about-healthcare-is-wrong-in-one-million-charts-a-response-to-noah-smith/ …
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Sweet. I have a to do to write an article for Ordinary Times on generic drug manufacturing, I was going to cite your work as incidental support, perhaps this is a good spur for me too!
End of conversation
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