ECONOMICS Health economics, having been developed as a distinct discipline of Economics in the 1980s, is a relatively new field.

As the term implies, it is the application of economic principles to health. More specifically, it implies the use of economic methods to improve health using the most efficient interventions. Health economics contributes immensely to health planning. For a deeper understanding of the concepts of Health Economics it is best to understand health and economics separately. Economics Economics has been defined in different ways. Samuelson, an authority in economics, and the author of one of the most widely-read and referred-to textbooks in economics, has drawn up a list of definitions: 1. Economics is the study of those activities that involve the production and exchange of goods. 2. Economics is the science of choice. It studies how people choose to use scarce or limited productive resources (land, labor, equipment, and technical knowledge), to produce various commodities, and to distribute these goods to various members of the society for their consumption. 3. Economics id the study of money, banking, capital, and wealth. 4. Economics is the study of commerce among nations. It helps explain why nations export some goods and import others, and analyzes the effects of putting economic barriers at national frontiers. If we synthesize all these good definitions of economics, the following would perhaps be the most complete definition of economics as defined by Samuelson: Economics is the study of how people and society end up choosing, with or without the use of money, to employ scarce but productive resources that could have alternative uses, to produce various commodities and distribute them for consumption, now or in the future, among various persons and groups in society. It analyzes the costs and the benefits of improving patterns in resource allocation. Based on Samuelsons definition of economics, we can imply the following characteristics of economics: A. Economic resources will always be scarce, and people will always struggle to work against scarcity. The development of economics most likely stemmed from the fact that even when resources are abundant, they will eventually become scarce because of the fact that more people use the same resources as time passes.

There is scarcity of resources when people want more of a certain good than what is available. It necessitates some form of competition among individuals because there are not enough goods and services to satisfy everyone. B. There is a universal objective of attaining the maximum output out of a given input. Because of scarce resources that have alternative uses, man has the ever present problem of making choices to produce specific commodities for distribution and consumption. His objective is to choose the process or produce the commodity which will give the maximum benefit from a given input. Man has economic resources which he can use to produce commodities: land, labor, technology, and capital. LAND Historically, mans most important resource aside from himself is land. Man has depended on land and all that stems, grows, and develops from land. True enough, man has always tried to find ways to harness the resources and benefits from the land he occupies. This has been exemplified by the evolution of how man has struggled and struggles to survive. Hunting and fruit and vegetable gathering during the Stone Age gave way to farming and domesticating animals which made the use of land more efficient. Finally today, man is able to maximally use the smallest piece of land to produce the most number of crops, and livestock through the most modern agricultural and farming methods. Through time, man has learned to use land other than for the production of food. Today, the most efficient use of land becomes imperative as the human population steadily grows.