Asthma is one of the most common health burdens on American families. An understanding of how the costs of asthma are distributed across communities is essential to realizing cost savings from preventative care. We model the household’s utilization of hospital services using Grossman’s health production framework. We then test for differences in asthma-related hospitalizations by race using inpatient records from the Massachusetts Division of Health Care Finance. On average black and nonwhite-Hispanic patients stayed between one-third and one-fourth of a day less than similar white patients which translates into a difference in expenditures of $8 million over 1994–2002. The difference in expenditures raises questions for market-based methodologies to value health and for policies directed at reducing inequalities in health outcomes.
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