Three essays on intra -household resource allocation, the cost of illness measure, and immunization policy

The dissertation comprises three chapters, ranging from health economics to immunization policy analysis. In the first and second chapters I focus mainly on establishing theoretically correct measures of welfare benefit, while in the third chapter I aim to determine which kind of immunization program is best by using better measures of both benefits and costs associated with one episode of typhoid fever.;The objective of the first chapter is to separately derive a mother's versus a father's willingness to spend money and time to save her child from one day of sickness. In order to accomplish this goal, I extend the existing theories of household decision-making by integrating Chiappori (1988)'s household decision-making model and Grossman (1972)'s health production model. All illnesses have financial and time consequences. When a child is sick, the mother and the father may respond differently to the health shock. They may have different preferences toward risk and they may not fully pool their income. They may thus want to allocate different amounts of money and time for improving their children's health. I take account of these differences using an interdisciplinary approach. The novelty of my approach, thus, is in its departure from the unitary household framework on which health valuation studies have relied until now. Finally, I find that maternal/paternal willingness to pay for the child's health is determined by six factors: the income share, the non-labor income, the price of medical care, an individual time value (i.e., wage), and the household's and individual technology for producing the child's health.;In the second chapter, I compare measures estimating the benefits of reduced morbidity in order to answer several questions: what would be the theoretically correct benefit measure for reduced morbidity? How much would the true measure differ from others? What are the determinants of the differences between the true measure and others? In order to answer these basic questions, I begin with Bockstael and McConnell (2007)'s model, which derives welfare measures for non-marginal changes of morbidity, and then incorporate insurance into it, based on the proposition that insurance may have a significant effect on the magnitude of the discrepancies between the cost-of-illness (COI) and willingness-to-pay measures. Next, I incorporate uncertainty into the model, since an individual does not know what her health will be with certainty (Berger et al., 1987). In doing so, I derive ex ante COI and ex ante compensating variation measures. Theoretically they are unlikely to be the same. Based on the findings of this study, the COI estimates are not reliable and do not give clear guidance as to the lower bound on the theoretically true estimates in measuring the benefits of reduced morbidity. Therefore, the value of COI estimates in decision-making may be limited.;The third chapter examines school-based immunization against typhoid fever in North Jakarta in order to assess the merits of such a program. Decisions about optimal vaccination programs involve tensions between efficiency and equity (Levy et al., 2007), especially in the developing world. Most vaccination policy analysis, however, mainly takes efficiency into account in order to find the lowest-cost program or the one providing maximum net benefits. Equality in the distribution of benefits is often overlooked (Yitzhaki, 2003) because of lack of data or interest. The absence of a systematic framework to consider both efficiency and equity results in a one-sided immunization policy that disregards or, at worst, enlarges the gap of inequality in children's immunization rate. In order to address this limitation, I incorporate efficiency measures and equity indicators within one framework. I believe that using quantitative indicators of inequality based on parents' level of education will help avoid immunization options that are dominated by efficiency at the expense of equity. The results of the analysis suggest that to strike a fair balance between efficiency and equity, policy makers would be best advised to adopt a school-based typhoid fever immunization program, partially funded by donors (and with plans for sustaining it in the future), in which the typhoid vaccine was simultaneously delivered with the TT booster vaccines. Even this solution, however, leaves unsolved the equity problem of immunizations for children not in school and the question of how such programs would be sustained after the end of the donor funding period (typically five years).