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Sir William Petty (17th century) estimated the value of a human
life between £60 and £90. In Victorian times the writings of
such pioneers of the sanitary movement such as William Farr
(1807-1883) developed the theme of the relationship between
economic growth and workers' health. Farr developed an early
version of the Human Capital approach to valuation of productivity
losses by calculating a person's monetary value as the current
value of the person's projected future earnings minus maintenance.
This value he used to calculate the rough benefits of health care
during the course of epidemics thereby applying such vales to the
advocacy of specific policies. However, during the latter half of
the last century and the first half of this century, economists
gave scant attention to the issue of the use of health care resources
and modern health economics began its relatively young life in the
1950s and 1960s. In the 1950s famous American economists, such as
Kenneth Arrow and Milton Friedman, started analyzing the application
of classic economic theory to health care and in particular to two
possible uses: as an aid to decisions on how to allocate resources
and as a vehicle for social reform.
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