The Palestinian Economy. Theoretical and Practical Challenges

Proceedings “The Palestinian Economy: Theoretical and Practical Challenges” 345
models (Gravelle, Morris et al. 2006), however, without opposing distributional
egalitarian objectives (Culyer 1980; Kaplow and Shavell 2002). The equity literature
contains, at least on the face of it, some useful pointers in this respect (Culyer, van
Doorslaer et al. 1992; Wagstaff and van Doorslaer 2000a). One explanation commonly
put forward is that, unlike efficiency, equity is a value-laden concept, and therefore, not
easily amenable to positive economic analysis (Le Grand 1984; Le Grand 1987). In
effect, the difficulty of drawing an explicit link between positive analysis of the
distribution of health care and equity as a normative objective has frequently been
translated into a conceptual and measurement system for Horizontal Inequity (HI),
whereby individual preferences are assumed not to influence the use of health care. As
stated by Culyer (1980): “[…] the source of value for making judgment about equity lies
outside, or is extrinsic to, preferences” [p. 71]. Accordingly, equity in health care delivery
is interpreted independently of individual utility and refers distinctly to “normative
principles” of “what ought to be”: health care ought to be allocated according to need,
and “what an individual ought to have as of right”: equal access to health care for a given
health status. This implies that an equitable health care distribution is the one that would
reflect exactly the health care needs across different groups of population (Wagstaff and
van Doorslaer 2000a). The latter, so conceived, should serve towards reducing
inequalities of health, though irrespective of individuals’ preferences vis-à-vis health
and/or health care consumption (Mooney 1987; McIntyre and Mooney 2007).
The methods developed by ECuity group (cf. e.g., van Doorslaer, Wagstaff et al.
1992; van Doorslaer, Wagstaff et al. 2000; Wagstaff, van Doorslaer et al. 2003; van
Doorslaer and Masseria 2004), and later extensively used in inequality literature (e.g.,
Hosseinpoor, Doorslaer et al. 2006; van Doorslaer, Clarke et al. 2006; Lu, Leung et al.
2007), are based on the concept of Concentration Curve (CC) and the associated
Concentration Index (CI). The proposed index of inequality is thus the one that measures
inequality in the distribution of health variable relative to individual incomes – a measure
of socio-economic status (SES). This index has appropriate properties and can be
decomposed in a linear way (Clarke, Gerdtham et al. 2003; Koolman and van Doorslaer
2004). Two aggregate (summary) measures of HI are proposed: the HI WVP index
(Wagstaff, Van Doorslaer et al. 1991) and the HI WV index (Wagstaff and van Doorslaer
2000b), which utilise similar conceptual foundation (standardisation through regression
technique), however, with the latter index being advocated on the grounds that the use of
direct standardisation, upon which the former is constructed, requires the use of grouped
data, which loses precision if individual data have to be grouped. More recently, an