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May 28, 2008

Spending on Medical Care: More Is Better?

Author Affiliations

Author Affiliations: Department of Health Policy and Management, Johns Hopkins Bloomberg School of Public Health, Baltimore, Maryland (Drs Anderson and Chalkidou); National Institute for Health and Clinical Excellence, London, United Kingdom (Dr Chalkidou).

JAMA. 2008;299(20):2444-2445. doi:10.1001/jama.299.20.2444

According to conventional economic theory, “more is better.” The most obvious example from economics is the assumption that more money leads to more happiness. Economists also believe in the law of diminishing returns—each additional unit provides a smaller increment in happiness than the previous unit. Behavioral economists recognize that individuals frequently compare their level of goods and services with that of their neighbors and are often happier when they have more than their neighbors.1