Estimating the extra cost of living for people with disabilities

Abstract

Addressing the extra economic costs of disability is a logical step towards alleviating elements of social exclusion for people with disabilities. This study estimates the long-run economic cost of disability in Ireland in terms of the additional spending needs that arise due to disability. It defines and estimates models of the private costs borne by families with individuals who have a disability in Ireland when compared with the wider population, both in general and by severity of disability. Our modelling framework is based on the standard of living approach to estimating the cost of disability. We extend on previous research by applying panel ordered probit models to living in Ireland survey data 1995-2001 in order to control for the effects of previous disability and income and correlated unobserved heterogeneity. The approach allows us to quantify, for the first time, the additional long-run economic costs of living associated with disability. Our findings suggest that the extra economic cost of disability in Ireland is large and varies by severity of disability, with important implications for measures of poverty.