How A String Quartet Explains Healthcare Costs : Planet Money The costs of education and healthcare have climbed faster than other prices throughout the economy — for decades. An under-appreciated economic theory explains why.
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How A String Quartet Explains Healthcare Costs

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How A String Quartet Explains Healthcare Costs

How A String Quartet Explains Healthcare Costs

How A String Quartet Explains Healthcare Costs

  • Download
  • <iframe src="https://www.npr.org/player/embed/757257796/757260212" width="100%" height="290" frameborder="0" scrolling="no" title="NPR embedded audio player">
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YASSER AL-ZAYYAT/AFP/Getty Images
Italian musicians perform the String Quartet in E minor by Giuseppe Verdi on August 8, 2016. / AFP / Yasser Al-Zayyat (Photo credit should read YASSER AL-ZAYYAT/AFP/Getty Images)
YASSER AL-ZAYYAT/AFP/Getty Images

As some parts of the economy have become more efficient, it's become cheaper to produce goods like televisions and brooms. But productivity growth is slower in a number of service sectors, including critical sectors like healthcare and education. And while that's okay, it could be the reason why going to college or getting knee surgery has become so expensive.

Today on The Indicator, how an economic theory known as the Baumol Effect explains the high prices of education and healthcare. Featuring Alex Tabarrok, the co-author with Eric Helland of "Why are the Prices so Damn High?"

Further reading: "Why are the Prices so Damn High?"

Music: "Beethoven's Op. 131 in C-Sharp Minor", Additional Music by Drop Electric.

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