ECS3704 Assignment 4 FINAL PORTFOLIO & ECP STUDENTS 2021

ECS3704 Assignment 4 FINAL PORTFOLIO & ECP STUDENTS 2021. QUESTION 1 1. “Health care should be a public good”. In your arguments for and against, show the characteristics of private versus public goods clearly. Definition of a public good In economics, a public good refers to a commodity or service that is made available to all members of a society. Typically, these services are administered by governments and paid for collectively through taxation. Societies will disagree about which goods should be considered public goods; these differences are often reflected in nations’ government spending priorities. An important issue that is related to public goods is referred to as the freerider problem. Since public goods are made available to all peopleregardless of whether each person individually pays for themit is possible for some members of society to use the good despite refusing to pay for it. People who do not pay taxes, for example, are essentially taking a "free ride” on revenues provided by those who do pay them, as do turnstile jumpers on a subway system. It is therefore paramount access health system guided by the above background. Pure public characteristics Norrivalry 1) Indivisible, one person's consumption does not reduce the quantity available (MC=0). 2) Excluding anyone from consuming a nonrival good is Paretoinefficient. Nonexcludability — It is impossible to exclude particular individuals from consuming goods or not possible to assign property rights. — Criteria are stringent and grey arrears abound, technology also changes classification over time. — Nonexcludability is advocated commonly because it’s costly enforce excludability. Characteristics of private goods — Rivalry in consumption: one individual's consumption reduces availability to other individuals. — Excludability: consumption of a private good can be restricted to given individuals by assignment of property rights typically by payment. — These force customers to revel their preferences and create allocative efficiency. Guided by the above characteristics of both public and private goods, the next section is going to analyse the gist of the question: “Health care should be a public good”. “Health care should be a public good”. Health generally is not considered a public good, because nonpaying individuals (for health insurance, healthy food, etc.) may not be able to achieve good health. Efforts to introduce universal health coverage in all countries will move healthcare closer towards being a public good. The adoption of social insurance systems or other publicly financed health insurance, where all citizens are insured and can utilize healthcare services regardless of whether they can afford it or not, suggests that insured health services then become nonexcludable and nonrivalrous, better approximating a public good. I would argue that public health 1s a prime example of a public good, and this notion helps us to understand the true contribution of public health to society. First, building on the classical definition of public goods, public health is a collective property that depends principally on the conditions that create public health (1.e. the structural, social, and political forces that produce health of populations) rather than on any individual action. These conditions are features of social structures that are not owned and not buyable by individuals. Salutogenic urban environments seek to be both nonexcludable and nonrivalrous; so do policies that incentivize healthier foods and efforts to minimize pollution. As well articulated in Global Public Goods for Health, the provision of public health is inextricably linked to government action and other classic public goods. Therefore, the conditions that promote the health of the public are classic public goods, even if an increasingly assertive ownership society may threaten some of that. Knowledge (for example, on health risks), technology, policy, and health systems have many properties of considered public goods— but, as Smith argues, modern health technologies are “increasingly patented and thus made artificially excludable.” Likewise, health systems, absent public financing, are not affordable to many QUESTION 2 2. "Discuss or reflect on inequality and poverty and the impact of personal income tax funded cash transfers on work effort, also during the Covid19 pandemic in South Africa.” Government policy can respond to rising income inequality in many different areas, with a particular focus on three policy areas — education, jobs and taxes and transfers. A final area of policy focus is taxes and transfers, or the money that the state gives and takes. In developed economies, taxes and transfers do much to reduce inequality, although there is room in many countries to improve their performance. That may mean better focusing assistance on those who need it most and limiting tax breaks and allowances that disproportionately benefit high earners. All this highlights the reality that policies targeting inequality and inclusive growth need to go beyond just supplementing people’s incomes. For example, policy may need to focus more on supporting young people from poorer families in education and on creating health and lifestyle programs specifically targeted at lowincome group. Even if the term may not be in everyday use, tax and transfer systems are familiar to most people. The “tax” part needs little explanation, for now; the “transfer” part essentially covers payments made by the state, such as unemployment and family benefits. These days, complex tax and transfer systems are a feature of life in developed and, increasingly, in developing — countries. They have many different social and economic objectives, but, from the perspective of income inequality, the main concern is over how much they redistribute across society. The extent to which this happens is determined by three main factors: