Econ2D03YanLing, Zheng 1055775
Economics 2D03 Assignment #2
Student:Yang, Zhi Xing
a) List three factors that led to dramatic improvement in life expectancy.
Three factors that led to dramatic improvement in life expectancy are
economic growth, which raised living standards and improved nutrition; public health
and related initiatives, especially in the period from about 1870 to 1940; and modern
medicine in the period from 1940 to the present.
b) What are the demerits and merits of private financing of health care?
Everything has two sides positive or negative and it is as well to look at both.
On one hand, the private financing would reduce the relative burden on people
with higher incomes. And it opens better access for those willing to pay and able to
pay. In additional, private financing quite genuinely offers them “more, for less”,
while offering the rest of the population “less, for more”. Private financing of health
care at the same time make a phenomena appears in several countries, that is, the
political systems have become increasingly sensitive to the priorities of the wealthy.
On the other hand, the private payments may limit access by people with the
lower incomes as the higher cost of it. The private insurance systems incur heavy
administrative costs to identify relative risks and set corresponding premiums, to
market policies and to adjudicate and pay individual claims. Those may lead to a less
efficient and more expensive system overall, through increased overhead costs,
weaker control over prices, and reduced potential for managing care patterns.
Diversion of care from those with greatest needs to those with greatest resources
results in a less effective distribution of services.
Question #2: Econ2D03YanLing, Zheng 1055775
a) What is pro-poor growth?
According to Ravallion, ‘pro-poor growth’ is any growth in mean income that
benefits poor people. According to Kakwani, growth is poor-poor if it benefits the
poor proportionately more than the non-poor; roughly speaking, if inequality falls.
According to Osmani, simply reducing poverty cannot a sufficient condition for
growth to be pro-poor. There has to be a bias in favor of the poor.
b) In this context, summarize the views held by Ravallion, Kakwani and others?
Ravallion’s view: any growth that reduces poverty is said to be pro-poor.
Kakwani’s view: a growth process is pro-poor only when poor benefit proportionately
more than the rich.
According to Osmani’s view, pro-poor must refer to both concepts and we must
identify a benchmark that will allow us to gauge the “pro-poorness” of growth.
Therefore, pro-poor growth is a growth process that reduces poverty more than it does
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