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The European Journal of Health Economics

pp 1–15

First Online: 13 April 2017Received: 06 June 2016Accepted: 06 April 2017DOI: 10.1007-s10198-017-0893-7

Cite this article as: Melnychuk, M., Solmi, F. & Morris, S. Eur J Health Econ 2017. doi:10.1007-s10198-017-0893-7


The objective of disability policy is to create a society where people with disabilities and their families enjoy an equal standard of living to those without disabilities, though evidence to underpin policy is sparse. We defined the compensating variation CV of child disability as the amount of additional income a family with a disabled child would require to achieve the same living standards as a similar family without a disabled child. The aims of this study were to estimate the CV for child disability and to explore how this varied for different levels of disability and reference levels of living standards. Using data on 54,641 families from the Family Resources Survey 2004–2012, we matched families with cases and without controls a disabled child on family and child characteristics plus living standards and calculated the income difference inclusive of disability benefits. Our findings suggest that across families with the most disabled children, a compensating variation equal to an extra £56–£79 a week was required to achieve the same living standards as matched families without a disabled child compared with the mean level of state disability benefit £47–£71 a week in this group.

KeywordsCompensating variation Child disability Matching Living standards Electronic supplementary materialThe online version of this article doi:10.1007-s10198-017-0893-7 contains supplementary material, which is available to authorized users.

JEL ClassificationC81 D1 I1 J1  Download fulltext PDF

Author: Mariya Melnychuk - Francesca Solmi - Stephen Morris



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