Economic Analysis of Social Issues 1st Edition by Alan Grant

Exercise 8

[Related to Application 14.1 on page 280] The United States compares very unfavorably to Japan in life expectancy. In the United States, average life expectancy at birth is less than 79 years; in Japan, life expectancy is almost 83 years. However, the United States spends 250% more on health care per person than Japan does. Read Application 14.1 and explain clearly why these numbers may not be evidence of the superior cost-effectiveness of the Japanese health care system.