BECE 141
ECONOMICSOFHEALTHANDEDUCATION
IGNOU BECE 141 Solved Free Assignment
BECE 141 Solved Free Assignment July 2024 & January 2025
A. Long Answer Questions
Q 1) Discuss the concept of ‘equally distributed equivalent achievement’ (EDEA) in the context of ‘gender adjusted health equality (GAHE)’.
Ans. The concept of “equally distributed equivalent achievement” (EDEA) plays a central role in evaluating fairness in health outcomes across different social groups, especially when discussing gender.
It helps move beyond just average health data to examine how achievements are distributed among individuals of different genders.
EDEA takes into account not just the level of health achievement but how evenly that achievement is shared between men and women.
A society may have good average health statistics, but if women consistently fare worse than men, EDEA reveals the hidden inequality.
In the context of Gender Adjusted Health Equality (GAHE), EDEA serves as a measure to adjust for gender disparities.
GAHE aims to reflect the health status of both genders fairly, not letting higher male health outcomes mask the struggles women face in accessing or receiving healthcare.
EDEA ensures that the benefits of health care are not only widespread but equitably shared. It emphasizes that health equality is not simply about equal treatment, but also about equal outcomes. If one gender is left behind, the overall achievement is discounted.
This concept is particularly useful in development studies, where health indicators are often tied to broader questions of justice and policy effectiveness. It pushes policymakers to ask who benefits from health programs and whether these benefits are fairly divided.
For instance, if a country improves maternal healthcare, but men already have high access to general healthcare, EDEA might still show a gender gap. It reminds planners that efforts must not only increase health services, but also target inequalities.
EDEA values both efficiency and fairness. It rewards health improvements that are evenly spread rather than concentrated in one gender. In this way, it calls for gender-sensitive planning and assessment of health systems.
When comparing two societies with similar average health levels, the one with more equal gender distribution of those achievements scores higher in EDEA. This helps in evaluating real progress towards gender-sensitive development goals.
GAHE, when measured using EDEA, can bring attention to issues like female undernutrition, limited reproductive rights, or gender bias in mental health support. It forces recognition of those gender-specific challenges.
EDEA also has a philosophical side, inspired by Amartya Sen’s ideas of capabilities and functioning. It reflects a concern not just with what people have but with what they can actually do or be—especially in relation to health.
Health, after all, is not just survival—it’s about living a full life. EDEA ensures we ask whether both men and women have equal opportunities to enjoy such a life, without structural barriers.
This is important because many inequalities are hidden behind averages. EDEA unmasks these by showing how much inequality would need to be removed to achieve an equal distribution of health outcomes between genders.
Using EDEA within GAHE also provides a numerical way to assess progress. It helps set concrete goals for narrowing gender health gaps and allows for year-by-year tracking of improvements or setbacks.
In policy terms, applying EDEA encourages inclusive healthcare programs that recognize different gender needs. For example, health campaigns might need to reach rural women differently than urban men, considering social and economic barriers.
It also helps identify the roots of inequality. Poor education, domestic violence, workplace discrimination—all of these affect women’s health and can cause lower EDEA scores. Thus, health policy becomes deeply tied to social policy.
EDEA and GAHE together promote accountability. Governments can’t claim success just by improving life expectancy or vaccination rates—they must show those gains are shared fairly across gender lines.
This approach is especially vital in low- and middle-income countries, where women’s health may be overlooked due to cultural or resource constraints. EDEA highlights where investment is needed most.
While EDEA is a technical term, its meaning is deeply human. It calls for compassion, fairness, and inclusion in the way we think about health. It’s about ensuring no one is left behind because of their gender.
Q 2) Interpret the essence of Solow Residual.
Ans. The Solow Residual is a key concept in growth economics that captures the part of economic growth not explained by the accumulation of capital and labor. It is often seen as a measure of technological progress or productivity improvements within an economy.
Developed by economist Robert Solow in the 1950s, the residual represents the unexplained portion of output growth in his growth model. After accounting for increases in inputs like labor and capital, the remaining growth is attributed to efficiency or innovation.
In essence, the Solow Residual highlights the importance of “how” resources are used, not just “how much” is used. It suggests that merely increasing labor or machines isn’t enough—how effectively they are used matters greatly.
This concept was a breakthrough because it provided a way to quantify the impact of intangible factors such as technology, better management, improved skills, and institutional development. These elements drive productivity without necessarily increasing input.
Solow’s model assumes constant returns to scale and diminishing returns to individual inputs. This means that doubling capital or labor alone won’t double output—there’s a limit to what inputs can do without innovation.
By isolating the effects of capital and labor, the residual becomes a rough estimate of Total Factor Productivity (TFP). TFP reflects improvements in the efficiency of production, often linked with scientific advancements and learning by doing.
What makes the Solow Residual fascinating is that it gives voice to silent contributors to growth—ideas, skills, systems, and technological upgrades. These are harder to measure but crucial in modern economies.
For instance, two countries with the same increase in labor and capital may grow at different rates. The one with a higher Solow Residual is likely applying its resources more efficiently through innovation or better governance.
Despite its significance, the Solow Residual is also criticized for being a “measure of ignorance.” Since it captures everything not explained by capital or labor, it can lump together various unobserved effects, making it difficult to interpret precisely.
Yet, it remains useful as a diagnostic tool. Policymakers and economists use it to understand the hidden forces behind economic growth, especially when output grows faster than input accumulation.
In developed countries, where capital and labor inputs grow slowly, the Solow Residual often accounts for a large part of economic expansion. It reflects gains from research, automation, and organizational improvements.
In developing countries, a low or negative residual may suggest inefficient resource use, poor infrastructure, or slow adoption of new technologies. Improving these factors can boost productivity without necessarily increasing labor or investment.
Understanding the Solow Residual also helps explain why simply investing in machinery doesn’t guarantee long-term growth. Sustainable development depends on improving the quality and effectiveness of how all inputs work together.
It brings attention to education, innovation systems, digital infrastructure, and research institutions as indirect but powerful drivers of growth. These do not show up directly in capital or labor but shape the Solow Residual.
Over time, economists have refined the model by including human capital, such as education and skill levels. This has helped reduce the unexplained portion of growth, but a significant residual often remains.
Thus, the Solow Residual remains a reminder that not all growth is visible or tangible. Much of it comes from learning, adapting, and evolving as a society—elements that can’t be easily measured but deeply affect output.
It also has policy implications. Governments can’t rely solely on increasing spending or workforce numbers; they must foster environments that encourage innovation, entrepreneurship, and efficient public institutions.
Moreover, the Solow Residual shows why technological transfer is vital for developing countries. Access to better tools, processes, and ideas from more advanced economies can rapidly raise productivity.
B. Medium Answer Questions
Q 3) Specify the conditions for the utility maximization of health care services.
Ans. Utility maximization in health care refers to achieving the highest possible satisfaction or well-being from the use of health services, given limited resources. For individuals, it means making choices that bring the greatest benefit to their health and overall life quality.
One of the main conditions for utility maximization is rational decision-making. The patient must have enough information and understanding to choose services that truly improve their health, rather than making random or uninformed decisions.
Budget constraint is another critical condition. Since people have limited income, they must weigh the cost of health care against other needs. Maximum utility is achieved when spending on health delivers the best outcome compared to other spending options.
Access to health services is essential. If quality health care is available and reachable, people can choose the right services at the right time. Without physical or financial access, even rational choices can’t lead to utility maximization.
Consumer preferences play a key role. Every individual values health differently. Some may prioritize regular checkups, while others focus on emergencies. Utility is maximized when services align with a person’s preferences and lifestyle.
Efficiency in service delivery also affects utility. If health care is slow, disorganized, or of poor quality, it wastes time and money. Efficient systems ensure patients get timely care, leading to better satisfaction and improved outcomes.
Continuity of care is important for utility maximization. Long-term doctor-patient relationships, proper follow-ups, and coordinated care across services help maintain good health and prevent complications, boosting overall utility.
Information symmetry between provider and patient is another vital condition. When both parties clearly understand each other, decisions are made with full awareness, reducing risks and improving treatment effectiveness.
Health literacy contributes greatly. When people understand medical terms, risks, and preventive measures, they can take better control of their health decisions, leading to smarter choices and higher utility.
Insurance coverage also influences utility. With financial protection, people are more likely to seek preventive care rather than delaying treatment due to high costs, which can later result in serious complications.
Trust in the health system increases utility. When patients feel respected, heard, and confident in their care, they are more likely to follow medical advice and maintain regular contact with the system, improving long-term results.
Cultural sensitivity of the services matters too. Health care that respects a person’s values, language, and traditions helps build comfort and understanding, which enhances the patient’s experience and satisfaction.
The availability of choices in providers or treatments also improves utility. When patients can choose among options, they can select what suits them best in terms of comfort, effectiveness, and affordability.
Timeliness in care impacts utility greatly. Delayed services can worsen health and cause stress, reducing satisfaction. Prompt care ensures better outcomes and efficient use of time and money.
Q 4) Discuss the factors that result in ‘market failure’ in health insurance.
Ans. Market failure in health insurance occurs when the free market does not allocate health coverage efficiently or fairly. Several key factors contribute to this failure, making access to insurance unequal or excessively costly for some groups.
One major cause is asymmetric information. In health insurance, buyers usually know more about their health status than sellers do. This imbalance leads to problems like adverse selection, where only high-risk individuals opt for insurance, raising costs for everyone.
Adverse selection occurs when insurers cannot accurately price premiums due to hidden health risks. As a result, they may charge higher premiums or deny coverage, which drives away healthier individuals, weakening the risk pool further.
Moral hazard is another issue. Once insured, people might overuse health services or take greater risks, knowing their costs are covered. This overconsumption increases the burden on insurers and leads to rising premiums.
Lack of perfect competition also causes market failure. In many regions, only a few insurance companies dominate the market. This limits consumer choice, reduces price competition, and can result in higher premiums or poorer service quality.
Incomplete markets are a factor too. In many developing countries, there are no comprehensive insurance products for vulnerable populations. Without coverage options, large parts of society remain uninsured or underinsured.
Externalities in health care, such as vaccinations or contagious disease control, affect not just the insured individual but the wider public. Private insurers may not consider these benefits, leading to under-provision of preventive services.
High administrative costs also reduce market efficiency. Private insurers often spend heavily on marketing, underwriting, and profit margins, which doesn’t directly improve health but increases the overall cost of care.
Fragmentation of services in health systems creates inefficiencies. When multiple insurers and providers operate without coordination, it leads to duplication, confusion, and higher transaction costs, reducing the system’s overall effectiveness.
The presence of information barriers for consumers also plays a role. Many people struggle to understand complex insurance plans, hidden costs, or claim processes. This lack of clarity prevents informed choices and weakens trust.
Risk rating practices used by insurers often discriminate against the sick, elderly, or disabled. When insurers charge more to those with pre-existing conditions, it creates inequality and leaves the most vulnerable without affordable coverage.
Regulatory failures can worsen the problem. Without strict rules, some insurers may engage in exploitative practices or deny legitimate claims. Weak oversight can allow these behaviors to flourish, harming consumer welfare.
Public goods nature of health also contributes. Health insurance doesn’t operate like other markets because the societal benefits of a healthy population go beyond individual transactions, making it unsuitable for pure market solutions.
Equity concerns show that the market alone can’t ensure fair access. Poor individuals may simply not afford insurance, even if they need it the most. The market fails to protect them without government support or subsidies.
Q 5) Explain the concepts of educational ‘grants’ and ‘loans’ with their impact on the issues of educational subsidy and compensation.
Ans. Educational grants and loans are two primary tools used to support students in accessing education, especially higher education. Both aim to reduce financial barriers, but they differ in structure, expectations, and long-term impact.
Grants are financial aids provided to students that do not need to be repaid. These are usually given based on economic need, merit, or specific eligibility criteria like caste, gender, or disability status.
Loans, on the other hand, are borrowed amounts that students must repay after completing their education. These often come with interest, making them a long-term financial responsibility for the student.
Grants serve as a direct educational subsidy. They reduce the cost of education for students without increasing their future financial burden, making them especially useful for students from low-income families.
Educational loans act more like a compensation mechanism. They allow students to defer payment for education, assuming they’ll earn more in the future and can repay the loan with interest after gaining employment.
The impact of grants on educational equity is significant. They promote inclusion by offering financial relief to those who might otherwise be excluded from education due to poverty or marginalisation.
Loans, while helpful in increasing access, can sometimes discourage students from pursuing higher studies due to the fear of debt. This is particularly true for those unsure about job security after graduation.
Grants contribute to social mobility by ensuring that talented but financially weak students can complete their education and compete fairly in the job market, without lifelong debt concerns.
Loans, if not carefully structured, can widen inequality. Students from privileged backgrounds can pay off loans more easily, while those from weaker sections may struggle and get trapped in debt cycles.
Grants are often funded by government budgets or charitable institutions and are seen as a public investment in the future workforce. They reflect the belief that education is a right, not a privilege.
Loans shift the financial risk of education from the government or institution to the individual. While they expand access, they also treat education more like a private good than a public one.
In terms of economic policy, grants represent a subsidy that may not show direct returns but generate broader social and economic benefits, like a more skilled population and lower unemployment.
Loans, by contrast, aim to recover the cost of education over time. However, if many graduates fail to secure well-paying jobs, loan recovery becomes difficult and may impact the banking system too.
Grants can create a level playing field in competitive education systems. When talented students are supported regardless of wealth, it leads to better diversity and more equitable development.
Loans may lead to stress among students and their families. The burden of repayment can influence career choices, pushing students toward high-paying jobs rather than socially useful or fulfilling work.
C. Short Answer Questions
Q 6) Differentiate between:
(a) Physical Capital and Human Capital.
Ans. Physical capital refers to man-made goods like machinery, tools, buildings, and equipment used in production. It plays a direct role in increasing productivity by improving the efficiency of work.
Human capital refers to the knowledge, skills, and health of people that enhance their ability to produce. Unlike physical capital, it resides within individuals and improves through education, training, and health care.
Physical capital depreciates over time with usage, requiring repair or replacement. Human capital, on the other hand, can grow over time with experience, learning, and personal development.
Investment in physical capital involves infrastructure and equipment, while investment in human capital involves schooling, healthcare, and skill-building programs.
Physical capital can be owned, transferred, or sold, whereas human capital remains with the person and cannot be separated or sold in a market-like product.
(b) Health Care and Healthcare.
Ans. “Health care” (two words) refers to the actions and services provided to maintain or improve health, such as diagnosis, treatment, prevention, and rehabilitation.
“Healthcare” (one word) is often used to describe the entire system, industry, or sector involved in delivering health-related services and managing public health.
Health care is personal and direct—it’s what a doctor or nurse provides during treatment. Healthcare is institutional and structural—it includes hospitals, policies, insurance systems, and workforce planning.
Health care focuses more on the interaction between a patient and provider, while healthcare encompasses the broader environment in which those interactions happen.
Although used interchangeably in casual use, the distinction helps in academic or professional discussions to separate the service from the system that delivers it.
(c) Cost of Illness Approach (CIA) and Willingness to Pay Approach (WTPA).
Ans. The Cost of Illness Approach estimates the economic burden of a disease by calculating direct costs like medical expenses and indirect costs such as lost income and productivity.
Willingness to Pay Approach measures how much individuals are ready to pay to avoid illness or improve health, reflecting personal preferences and perceived value of health benefits.
CIA focuses on measurable economic losses due to illness, giving policy-makers a sense of financial burden on the system and society.
WTPA includes subjective values, capturing what people feel their health is worth, even beyond actual financial loss—such as avoiding pain or improving quality of life.
CIA is more objective, based on real data from hospitals, insurance records, and employment loss. WTPA is based on surveys or hypothetical scenarios where people state how much they would pay.
While CIA helps in understanding disease impact and planning resource allocation, WTPA helps in benefit-cost analysis of public health projects, reflecting human behavior and priorities.
CIA is more suitable when health programs need justification through existing economic impact. WTPA is useful for assessing the value of preventive care, safety measures, or new treatments.
Q 7) Write short notes on the following.
(a) Concentration Index.
Ans. The Concentration Index is a measure used to understand inequality in health variables across different income or wealth groups.
It shows how a health-related outcome (like child nutrition or immunization) is distributed among rich and poor. If the value is zero, it means perfect equality.
A positive value indicates that the health benefit is concentrated among the rich, while a negative value means it’s more among the poor. It helps policymakers track and reduce inequality in health services.
(b) Positive Externality of Consumption.
Ans. A positive externality of consumption happens when a person’s consumption of a good benefits others as well.
In health, this could be getting vaccinated—when one person is vaccinated, they not only protect themselves but also reduce the chance of spreading disease to others.
These benefits are not reflected in the market price, so without government support, such goods may be under-consumed.
That’s why public intervention, like free vaccines or education, is important to promote such socially beneficial activities.
(c) Health Equity
Ans. Health equity means everyone should have a fair opportunity to be as healthy as possible, regardless of their background, income, caste, gender, or location.
It is not just about equal access but about removing unfair and avoidable differences in health.
Achieving health equity requires addressing root causes like poverty, discrimination, and unequal access to education and services. It’s about justice in health—not just health care.
BHIE 141 Solved Free Assignment July 2024 & January 2025