Vertical inequity was then measured through the kakwani index ki, which is the most widely used measure of progressivity in financing of a health system. The kakwani index computes the departure from proportionality of a progressive income tax by measuring the difference between the. The results showed that spending on srh services was highly regressive in both sites, with lower income. The horizontal inequity index h is a difference between the concentration coefficient of posttax income x dn and gn, normalized by gx, as in 6. The kakwani index is close to 0 in the case of formal payments, i. Country health profile 2017 portugal contents 1 highlights 1 2 health in portugal 2 3 risk factors 4 4 the health system 6 5 performance of the health system 8 5.
Outofpocket payments, vertical equity and unmet medical. In total 77 publications which fulfilled the criteria, based on screening of the title, were identified in the databases. Table 2, which is extracted from an excel file, shows the values for each quintile of r, q, a and fa2. The kakwani index for measuring progressivity of health care financing.
Therefore, the maximum concentration coefficient for taxes cannot be equal to 1, and, consequently, the maximum value of the kakwani index cannot be 1 minus the gini coefficient for pretax incomes, as generally described in the related literature. However, in the recent years relationship between agricultural growth and poverty reduction seems to have weakened. The vertical equity index v is equal to kakwani progressivity index kpt scaled by the average tax rate tx. There is a growing focus on the goal of universal coverage in health systems. Hence to avoid further regressivity of oop payments with cost. I have used conindex to compute the concentration index erreygers. Measuring progressivity of health care payments introduction. Kakwani indices yaxis depending and effective tax rates xaxis. It is the difference between a concentration index. A read is counted each time someone views a publication summary such as the title, abstract, and list of authors, clicks on a figure, or views or downloads the fulltext. Pramod kumar chaubey egyankosh, ignouindira gandhi national open university. Tackling income inequality the role of taxes and transfers isabelle joumard, mauro pisu, debbie bloch online first please cite this article as. Measuring the redistributive impact of taxes and transfers.
Adept also outputs the kakwani index of progressivity, for each source and for total health finance. Some reduction of inequity in the distribution of informal gratuities indeed took place the kakwani index changed from. In reforming health care for the 21st century, equity in health care financing has become a major policy goal. Joumard, isabelle, mauro pisu and debbie bloch 2012, tackling income inequality. Outofpocket payments might threaten the vertical equity of financing and generate unmet medical needs. Also shown is the sum of fa 2 across the five quintiles. The findings indicate that laborusing technological change generates absolute and relative propoor effects. Inequity in costs of seeking sexual and reproductive. The kakwani index uses the gini framework to measure how progressive a social intervention is. Kakwani decomposition of redistributive effect core. In addition to estimating contributions to each financing mechanism as a percentage of consumption expenditure in each quintile, it was necessary to calculate the incidence of financing using the lorenz and concentration curves to establish whether a health care financing mechanism is progressive, regressive or. We used expenditure data for maternal and neonatal care, collected during postpartum interviews.
The kakwani index is a measure of the progressivity of a social intervention, and is used by. Chinas personal income tax is introduced after the reform and opening up, and peoples republic of personal. Changes in equity in outofpocket payments during the. In the transition from a planned economy to a marketoriented economy, chinas state funding for health care declined and traditional coverage plans collapsed, leaving chinas poor exposed to potentially ruinous health care costs. The vertical equity index v is equal to kakwani progressivity index k pt scaled by the average tax rate tx, and normalized by gx, as shown by 7.
Consequently there are several aspects that ought to be taken into. This is specially an important feature of this framework since the wellknown progressivity indices are not infallible rigorous predictors of identifying equalizing interventions enami et al. The kakwani 1977 index of tax pro variance is between taxes and the cugressivity is defined as twice the area be mulative share of income recipients or of tween the concentration curves for taxes pretax income. A note on the maximum value of the kakwani index springerlink. How to do or not to do a health financing incidence. Interviews were conducted in 20052006, with a sample of 1200 slum residents in mumbai india. These four measures can be compared in view of whether they. Research on personal income tax affecting structure of resident consumption expenditure in china delong zhang college of economics, jinan university, guangzhou, china abstract the purpose of this thesis is to evaluate the impactof personal income tax on the structure of resident consumption expenditure. We analyzed spending on maternity care in urban slum communities in mumbai to better understand the equity of spending and the impact of spending on household poverty. R 2 is the sample variance of the fractional rank variable, h is the health payment variable. The overall tax revenue of a realworld personal income tax cannot be eventually paid only by the richest taxpayer.
The kakwani index for outofpocket payments was equal to 0. Vertical and horizontal equity of funding for malaria control. Income inequality has increased in most advanced and many developing economies over recent decades, reflecting a range of factors including globalization and technological change. A modified kakwani measure for health inequality health. Decomposition of change in sgini coefficient of inequality. Use the free adobe acrobat reader to view this pdf file summary. It is named after the economist who first proposed and used it, nanak chand kakwani. Decomposition of inequality change into propoor growth. The kakwani index was computed directly in a single step from convenient regression in the following form. On the one hand, oop burden increases awareness of treatment costs and limits unnecessary use of healthcare services. We propose simple modifications for the kakwani tax progressivity measure that make it suitable for evaluating access inequality for medical services. Maternal and neonatal health expenditure in mumbai slums. Tackling income inequality the role of taxes and transfers isabelle joumard, mauro pisu, debbie bloch online first.
In this paper we introduce a new methodology to study the degree of progression as well as the redistributive and reranking effects of a personal income tax system by employing and extending the new inequality curve and index proposed by michele zenga. Equity in financing and use of health care in ghana, south. The kakwani index is a measure of the progressivity of a social intervention, and is used by social scientists, statisticians, and economists. For example, at all india level, employment elasticity of growth in agricultural output has been found to be zero during 19939419992000 whereas it was 0. The kakwani index of progressivity is based on the trapproach and equals twice the area between the lorenz curve and the concentration curve of a tax.
There are nonetheless increasing variations in the. Consumption taxes and income inequality an international. Kakwani index is equal twice the area between the lorenz curve and the concentration curve of a tax, or transfer. The findings indicate that laborusing technological change generates absolute and relative propoor effects whereas. The kakwani index was originally devised to measure the progressivity of tax systems, in which case, it would be equal to the gini concentration index for the taxes collected minus the gini index for pretax incomes.
They are a particularly popular choice for the measurement of socioeconomicrelated health inequality wagstaff et al. This paper applies the framework for propoor analysis to welfare changes from a cgemicrosimulation model to analyze what are the better or worse models for agriculture modernization, and to estimate the contribution of growth and redistribution to changes in poverty in drc. In fact, it has been noted that equity or fairness in health financing, where households contribute to the health system according to their ability to pay atp, should form an important health system goal to promote universal health. Research on personal income tax affecting structure of. Catastrophic spending on srh services was calculated using the threshold of 10 % of total household income. Vertical and horizontal equity of funding for malaria.
It is a revised and upgraded version of inequal published by edward whitehouse in stb23. This can be shown to be equal to the absolute decline in the gini index for incomes, caused by the imposition of taxation. Concentration indices measure inequality in one variable over the distribution of another kakwani, 1977. I would like to know if theres anyone who might have a do file which computes the decomposition of the erreygers concentration index using the wealth index and education as the socioeconomic variables. This is the difference between the concentration index of taxes and an inequality index such as the gini index of gross incomes. In other words, taxes or transfers that would be classified.
Sep 15, 2016 there are positive and negative consequences of the implementation of out of pocket oop payments as a source of the healthcare financing. We also propose a measure using the gini coefficient or concentration index of consumption. The conventional categorisations of finance sources for health care are taxation, social health insurance, private health insurance and outofpocket payments. Agricultural modernization, structural change and propoor. In chapter 3 in this handbook, ali enami shows how these conditions are affected if. This suggests that the fraction paying no tax has served as an effective proxy for overall tax progressivity.
A note on the maximum value of the kakwani index request pdf. Decomposition of inequality change into propoor growth and mobility components. It is equal to the difference between the gini index for the social. Given an income distribution, the zenga curve compares the economic conditions of two exhaustive groups of population obtained by dividing. Our modification is to measure inequality using the ratio of the concentration index to the gini coefficient instead of the difference between them. Equitable financing is a key objective of health care systems. A measure of the progressivity or regressivity of health care payment systems. This is also the difference between the concentration index of the tax ic x and the gini index of gross income. For example, the world health report 2010 on universal coverage of health care 1 and the associated declaration of the world health assembly 2 urged member states to aim for affordable universal coverage and access for all citizens on the basis of equity and solidarity.
How to do or not to do a health financing incidence analysis. We analysed expenditure by socioeconomic status ses, calculating a kakwani index for a range of spending categories. Jun 09, 2008 the kakwani index was computed directly in a single step from convenient regression in the following form. The kakwani index and quintile ratios are used as measures of inequitable spending. Kakwani and pernia 2000, mcculloch, robson, and boulch 2000, ravallion and chen 2003, and son 2003. The effects are more pronounced when the negative deduction is taken into account total net income instead of net of tax income with a reynolds. New evidence on financing equity in chinas health care. Jun 27, 2011 the kakwani index for measuring progressivity of health care financing. As can be seen, the prereform income tax was progressive kakwani index is 0. Decomposition of inequality change into propoor growth and. Its importance is evidenced in policy documents, policy statements, the work of health economists and policy analysts.
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