The multiple dimensions of mental health services: a conceptual framework

It is usually unnecessary to define the output of an industry, but this is not the case with mental health services. Following Grossman's conception of health capital, the outputs of mental health care enter a household production function as a commodity vector. Considering the multiple and heterogeneous nature of the services of this industry, preferences exist in multi‐dimensional space. An application of the characteristics theory of consumer demand associated with Ironmonger and Lancaster illustrates the outputs in terms of two characteristics, viz. symptom alleviation and disability reduction. Representing preferences by indifference curves, in the usual way, clarifies the relationship between mental health care inputs and the outputs of mental health care. The theoretical problem in the economics of mental health care of whether, or how, individual preferences can count is also addressed. It is shown on an indifference map what it means when society institutionalises some individuals. This approach also enables the deinstitutionalisation movement to be placed into an economic context. It is noted that empirical work on goods and services that have multiple characteristics involves the application of hedonic price analysis, a technique already applied in the economic literature on mental health.