used to test whether there is horizontal equity in the allocation of primary care resources: after allowing for need, cost should not vary with a patient’s socio-economic status (Gravelle et al., 2006;Bago d’Uva, 2005). But if the data on patient morbidity are poor, any association between socio-economic status and healthcare costs may not be due to horizontal inequity but to the correlation of socio-economic status and unobserved aspects of morbidity.