Public goods and externalities: a research agenda for public health economics

Abstract

Among the many roles a government plays in our daily lives, protecting the public's health is one of the most conspicuous. The government provides goods and services such as registration of births and deaths, public health surveillance of disease and injury, outbreak investigations, research and education, health insurance for the poor and elderly, enforcement of laws and regulations, evaluation of health promotion programs, and assurance of a competent healthy workforce. In the past, economics in public health has almost exclusively focused on efficiency of programs through the use of cost-effectiveness or net present value measures clustered under the rubric of "economic evaluation." Efficiency measures are useful at the programmatic level. However, lack of full employment and market failures including public goods and the impact of consumers and producers actions not reflected in the markets (externalities) not only compromise efficiency but also generate health inequities. We propose an expansion of the scope of existing health economics research in an area characterized as public health economics--the study of the economic role of government in public health, particularly, but not exclusively, in supplying public goods and addressing externalities.