The purpose of this thesis is to analyse and clarify some aspects of economic behaviour arising from mental disorders, with particular focus on theoretical matters relating to the output of mental health care and the role of government.
Initially, some issues pertaining to methodology are discussed, including the relevance of the rationality assumption of economics. The methodological emphasis of current research, in wishing to produce empirical results before having asked some fundamental economic questions, is noted.
Attention is then directed to preliminary descriptive information which forms the background to the thesis. Some aspects of current arrangements regarding the provision of mental health care are described, particularly those arising within fiscal federalism.
The ensuing survey of the literature reveals a small, recent, overseas literature which is concerned mostly
with attempting cost studies and demand studies. It is noted that many of these studies have not firstly addressed some fundamental conceptual issues concerning what it is that is being measured, particularly relating to the output of the mental health care sector.
The new perspective being presented in this thesis attempts to address this inadequacy, the explanation of which is cast in a framework of ordinal utility. It is suggested that it is helpful to think of mental health as entering a household production function as a commodity vector. This facilitates an explanation of the relationship between household mental health care inputs and the output of the mental health care sector. Preference behaviour relating to two mental health sub-vectors, symptom alleviation and disability reduction, is examined. An application of this perspective is provided regarding what it means, in an economic sense, when an individual is committed, involuntarily, to in-patient
Mental health care can be understood in terms of the output of characteristics such as treatment, accommodation, home support, deprivation of liberty. Government intervention into the (joint) output of these characteristics is examined in terms of a society's desires for a particular level of quality of care and treatment. In other words, externalities pervade mental health care.
It is argued that these externalities can manifest themselves in a variety of ways although, on the basis of economic rationality, they reduce to two types. First, externalities arise because the preference functioning capacity of the individual is impaired such that preferences cannot be expressed or exercised successfully. Society cares, or does not care, when the individual, or the care-giving family, suffers. Second, externalities arise because the individual's utility function itself conflicts with society's norms. In this regard, it is a matter as
to whose rights prevail. Society, or its provider agents, may also believe that what is best for society is best for the individual, since he or she exhibits irrationality. But this explanation of government fits better into an organic view of the state. Currently, the medical profession, perhaps unwittingly, is playing a significant economic function for government intervention in its capacity as agent or "gatekeeper" of care and treatment. Whether or not this significant role is desirable is not considered.
Essentially, economic behaviour with respect to mental disorders is occurring in a climate of stigma, consumer ignorance and, beyond the "clear-cut" cases wherein society ought to impose its preferences upon individuals, little opportunity for exercising consumer preferences. In this regard, special attention to the meaning of output and the role of government is warranted.