Michael
Attempting as best I can to phrase my argument so as to fit you
house-heating analogy, what if the reason why some of your rooms were
cold was that you had arranged the controls on each indivudal radiator
so that the average heat over the entire house was maximised (which
might have meant putting the most heat into the est insulated rooms).
Suppose you wanted to reduce the inequalities between the temperatures
in each room, so you turned down the heat in the well insulated rooms,
and raised it in the poorly insulated rooms. Now the avarge
temperature in the whole house will be less, but so will the
inequalities. In normal economics' terminology you have traded off
efficiency against equity (and there is nothing wrong with doing this),
though I would prefer to say that you have objectives relating to both
heat maximisation and heat distribution, and that you have now OPTIMISED
the situation (given the heating system available to you) by
sacrificing one objective a bit (the maximisation one) in order to do
better on the other one (the distribution objective). If you replace
"heat" with "health" in the foregoing, we are back in context! It was
a nice analogy!
If you don't like the ways economists use the word "efficiency" (and
there some other variants, like Pareto Efficiency, besides the two
simple ones I offered originally) that's fine, but we got there for
quite good reasons. The important thing is that we agree about the
substance, and try to make sure that others understand what that is.
"Efficient" interdisciplinary communication is a non-trivial problem.
Alan Williams
michaelhughes wrote:
>
> I see where you are coming from on this, but I do have problems with the
> sort of utilitarian understanding of efficiency that you are using and which
> allows for the development of inequitable but still efficient distribution
> of health care resources. It feels counter-intuitive. Return to the
> engineering origins of this concept and consider an example - say the
> central healting in my seven room house. My aim might be to have an average
> temperature through the house of 70 degrees farenheit (sorry about the
> non-SI units). I would not feel that this had been achieved particularly
> efficiently if five rooms reached 70 degrees, one room reached 30 degrees
> and another 110 degrees.
>
> In the public policy field in the UK if you look at the way that "Best
> Value" seems to be being developed as a policy tool for investigating the
> efficiency of public services "equitabilty" in one form or another is an
> impoirtant measure.
>
> ----- Original Message -----
> From: "Alan Williams" <[log in to unmask]>
> To: <[log in to unmask]>
> Sent: Thursday, January 17, 2002 3:48 PM
> Subject: Re: equity and efficiency
>
> > Perhaps I should have been more explicit when pointing out that when
> > comparing "efficiency" with "equity" I was, as I said, taking the
> > efficiency objective to mean "a desire to improve overall population
> > health as much as possible" and the equity objective to mean "the
> > reduction of inequalities in people's lifetime experience of
> > health" It is certainly possible to think of trade-offs between
> > these objectives, which will be relevant to judging the effectiveness of
> > particular activities, even if they purport only to be directed at one
> > of the objectives. We might then say that the cost, in terms of
> > worsening health inequalities, in going single-mindedly for improving
> > the overall health of the entire population, is "too high".
> > Conversely, in some other situation, we may say that the cost, in terms
> > of sacrifices in overall population health, of going single-mindedly for
> > reducing health inequalities, is too high. And this is quite
> > independent of whether the particular policies we are looking at are
> > "technically efficient" or not. Technically inefficient activities
> > simply reduce how much you can achieve from a given budget.
> >
> > Alan Williams
> >
> > Mike Hughes wrote:
> > >
> > > I don't see that that you can trade-off equity for efficiency as Alan
> > > suggests. In respect of the distribution of healthcare resources I would
> > > have thought that one of the few reliable measures of effectiveness, and
> > > thus of efficiency, was equitable distribution according to need. Thus
> the
> > > answer is yes it can be both. In fact it also means that health care
> > > resources can't be inequitable and efficient. It does not necessarily
> > > follow, however, that that all equitable services are efficient.
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