Implicitly Estimating the Cost of Mental Illness in Australia: A Standard-of-Living Approach

Author(s)
Nghiem, Son
Khanam, Rasheda
Vu, Xuan-Binh
Tran, Bach Xuan
Griffith University Author(s)
Year published
2019
Metadata
Show full item recordAbstract
BACKGROUND: Estimating the costs of mental illness provides useful policy and managerial information to improve the quality of life of people living with a mental illness and their families. OBJECTIVE: This paper estimates the costs of mental health in Australia using the standard-of-living approach. METHODS: The cost of mental illness was estimated implicitly using a standard-of-living approach. We analysed data from 16 waves of the Household, Income and Labour Dynamics in Australia Survey (HILDA) using 209,871 observations. Unobserved heterogeneity was mitigated using an extended random-effects estimator. RESULTS: The ...
View more >BACKGROUND: Estimating the costs of mental illness provides useful policy and managerial information to improve the quality of life of people living with a mental illness and their families. OBJECTIVE: This paper estimates the costs of mental health in Australia using the standard-of-living approach. METHODS: The cost of mental illness was estimated implicitly using a standard-of-living approach. We analysed data from 16 waves of the Household, Income and Labour Dynamics in Australia Survey (HILDA) using 209,871 observations. Unobserved heterogeneity was mitigated using an extended random-effects estimator. RESULTS: The equivalised disposable income of people with mental illness, measured by a self-reported mental health condition, needs to be 50% higher to achieve a similar living standard to those without a mental illness. The cost estimates vary considerably with measures of mental illness and standard of living. An alternative measure of mental illness using the first quintile of the SF-36 mental health score distribution resulted in an increase of estimated costs to 80% equivalised disposable income. CONCLUSION: People with mental illness need to increase equivalised disposable income, which includes existing financial supports, by 50-80% to achieve a similar level of financial satisfaction to those without a mental illness. The cost estimate can be substantially higher if the overall life satisfaction is used to proxy for standard of living.
View less >
View more >BACKGROUND: Estimating the costs of mental illness provides useful policy and managerial information to improve the quality of life of people living with a mental illness and their families. OBJECTIVE: This paper estimates the costs of mental health in Australia using the standard-of-living approach. METHODS: The cost of mental illness was estimated implicitly using a standard-of-living approach. We analysed data from 16 waves of the Household, Income and Labour Dynamics in Australia Survey (HILDA) using 209,871 observations. Unobserved heterogeneity was mitigated using an extended random-effects estimator. RESULTS: The equivalised disposable income of people with mental illness, measured by a self-reported mental health condition, needs to be 50% higher to achieve a similar living standard to those without a mental illness. The cost estimates vary considerably with measures of mental illness and standard of living. An alternative measure of mental illness using the first quintile of the SF-36 mental health score distribution resulted in an increase of estimated costs to 80% equivalised disposable income. CONCLUSION: People with mental illness need to increase equivalised disposable income, which includes existing financial supports, by 50-80% to achieve a similar level of financial satisfaction to those without a mental illness. The cost estimate can be substantially higher if the overall life satisfaction is used to proxy for standard of living.
View less >
Journal Title
Applied Health Economics and Health Policy
Note
This publication has been entered into Griffith Research Online as an Advanced Online Version
Subject
Health services and systems
Public health
Applied economics
Marketing