nep-hea New Economics Papers
on Health Economics
Issue of 2005‒09‒11
nine papers chosen by
Yong Yin
SUNY at Buffalo, USA

  1. When Do Health Savings Accounts Decrease Health Care Costs? By Masahito Watanabe (Georgetown University)
  2. Household Demand for Health Insurance: Price and Spouse's Coverage By Marjorie Honig; Irena Dushi
  3. Offers or Take-up: Explaining Minorities’ Lower Health Insurance Coverage By Irena Dushi; Marjorie Honig
  4. Price elasticity estimates for tobacco and other addictive goods in India By Rijo M. John
  5. Aging, Health and Aggregate Medical Care Spending in France By Michel Grignon
  6. Real Output in Mental Health Care During the 1990s By Ernst R. Berndt; Alisa B. Busch; Richard G. Frank; Sharon-Lise Normand
  7. Work Disability is a Pain in the *****, Especially in England, The Netherlands, and the United States By James Banks; Arie Kapteyn; James P. Smith; Arthur van Soest
  8. Biology as Destiny? Short and Long-Run Determinants of Intergenerational Transmission of Birth Weight By Janet Currie; Enrico Moretti
  9. The Super Size of America: An Economic Estimation of Body Mass Index and Obesity in Adults By Inas Rashad; Michael Grossman; Shin-Yi Chou

  1. By: Masahito Watanabe (Georgetown University) (Department of Economics, Georgetown University)
    Abstract: The introduction of Health Savings Accounts (HSA) is aimed to reduce skyrocketing health care costs. The expected mechanism, according to proponents, is that enrolling in the HSA program reduces demand for health services by increasing the costconsciousness of consumers currently covered by conventional health plans. This paper addresses when such accounts can decrease health care costs. The analysis in a simple one-period framework reveals that if the HSA program is to decrease medical services consumption, it is not due to the HSA itself but is due to a high-deductible health insurance policy accompanied by the account. In other words, the HSA program can lower health expenditure only when it is accompanied by a higherdeductible health plan. The tax-preferred individual accounts themselves encourage health care consumption by lowering the effective price of health care. Therefore, the cost-containment effect of a high-deductible plan is counteracted by tax deductibility. The overall effect of the HSA program on health care costs is ambiguous and depends on these opposing forces. Classification-JEL Codes: D91, H51, I11
    Keywords: Health Savings Accounts, Medicare reform, Health insurance
  2. By: Marjorie Honig (Hunter College, Department of Economics); Irena Dushi (International Longevity Center-USA)
    Abstract: Demand for employment-based insurance is typically treated as an individual rather than a household decision. Dual-earner households are now the modal U.S. married household, however, and most firms offer family coverage as an option available to employees. Findings from a model estimating married workers' take-up of their own insurance with their own and their spouses' offers indicate that both own price and potential coverage under spouses' plans are important determinants of take-up. We find evidence of selection into jobs offering insurance among wives but not husbands. Findings also suggest that dual-earners are not aware of the potential wage/benefit trade-off. Data are from the 1996 panel of SIPP.
    JEL: J32 J10 J12
    Date: 2005
  3. By: Irena Dushi (International Longevity Center-USA); Marjorie Honig (Hunter College, Department of Economics)
    Abstract: There is considerable evidence that minorities are less likely than whites to be covered under employment-based health insurance. In 2001, rates of Hispanic full-time workers were 21 and 15 percentage points lower than those of non-Hispanic white men and women. For policy purposes, understanding whether these disparities are generated by differences in the likelihood of being in a job offering coverage or in decisions regarding take-up of offered coverage is critical. We find significant effects of race and ethnicity on offers but not on take-up, controlling for job and demographic characteristics including nativity. Magnitudes of these effects differ by gender and household composition.
    JEL: I10 J15 J32
    Date: 2005
  4. By: Rijo M. John (Indira Gandhi Institute of Development Research)
    Abstract: The tax base of tobacco in India is found to be heavily depended on about fifteen percent of the tobacco users who represent cigarettes smokers. Non-cigarette tobacco products used by the majority of tobacco users are largely out of the tax net. Analysis of the price elasticity of various tobacco products would bring out the potential of tax as an instrument to control tobacco use of any kind. In this context, this paper examines how the demand for a variety of tobacco products and addictive goods such as pan and alcohol respond to changes in prices. The spatial variations of prices that are obtained from a cross section of 120,000 households spread across the country have been used for this purpose. Estimates of price elasticities showed that the own price elasticity estimates of various addictive goods in India ranged between -0.5 to -1.0 with bidis, leaf tobacco and alcohol having elasticities close to unity, cigarettes being the least price elastic of all. As against the general notions regarding the complementarity between cigarettes and alcohol, our study nds that these are substitutes at least in urban India. We also observed that, over a five year period, the addictive goods such as bidis and leaf tobacco in India have become slightly more price responsive while elasticity of cigarettes and pan have stabilized. With some assumptions, it is shown that taxes on cigarettes can be raised nearly 2.5 times the current level while that of bidis can be raised tenfold without any fall in revenue.
    Keywords: Tobacco, Bidi, Cigarette, Alcohol, Consumption, Elasticity, India
    JEL: C31 D12 H21 I18 R22
    Date: 2005–08
  5. By: Michel Grignon
    Abstract: I investigate the role of education on health, using country level data and the production frontier framework suggested by the World Health Organization to assess performances of health care systems. I find that the role of human capital is much smaller than what appears in the WHO frontier model, and the relationship exhibits diminishing return in the observed range. Taking into account the non-linearity in this relationship generates a different ranking of countries according to the efficiency of their health care system. This suggests that the method currently used by the WHO indeed favours health care systems operating in countries which underinvested in education in the past. The relationship between education and health changes around an average value of 8 years of education per individual: above that level, the return of years of education in health is zero.
    Keywords: Human capital, Rate of return, Economic impact, Efficiency
    JEL: I38
    Date: 2005–08
  6. By: Ernst R. Berndt; Alisa B. Busch; Richard G. Frank; Sharon-Lise Normand
    Abstract: Health accounts document changes over time in the level and composition of health spending. There has been a continued evolution in the ability to track such outlays. Less rapid has been the ability to interpret changes in spending. In this paper we apply quality adjusted price indexes for several major mental disorders to national mental health account estimates to assess changes in real "output". We show that using the new price indexes reveals large gains in real output relative to application of BLS indexes.
    JEL: I10 C43 O33
    Date: 2005–08
  7. By: James Banks; Arie Kapteyn; James P. Smith; Arthur van Soest
    Abstract: This paper investigates the role of pain in determining self-reported work disability in the US, the UK and The Netherlands. Even if identical questions are asked, cross-country differences in reported work disability remain substantial. In the US and the Netherlands, respondent evaluations of work limitations of hypothetical persons described in pain vignettes are used to identify the extent to which differences in self-reports between countries or socio-economic groups are due to systematic variation in the response scales.
    JEL: J28 I12 C81
    Date: 2005–08
  8. By: Janet Currie; Enrico Moretti
    Abstract: Little is known about the mechanisms underlying the transfer of economic status between generations. This paper addresses the question of whether inter-generational correlations in health contribute to the perpetuation of economic status. We examine inter-generational correlations in birth weight, a key indicator of the health of newborns that we link to future educational attainment and earnings using a unique data set based on California births from 1960s to the present. We use names and birth dates to link the records of mothers and children. We also identify mothers who are siblings. We show that there is a strong intergenerational correlation in the birth weight of mothers and children, but that a measure of household income at the time of the mother's birth is also predictive of low birth weight and that there is an interaction between maternal low birth weight and poverty in the production of low birth weight. Together these findings suggest that intergenerational correlations in health could play a role in the intergenerational transmission of income. Parent's income affects child health, and health at birth affects future income.
    JEL: I1
    Date: 2005–08
  9. By: Inas Rashad; Michael Grossman; Shin-Yi Chou
    Abstract: The increased prevalence of obesity in the United States stresses the pressing need for answers as to why this rapid rise has occurred. This paper employs micro-level data from the First, Second, and Third National Health and Nutrition Examination Surveys to determine the effects that various state-level variables have on body mass index and obesity. These variables, which include the per capita number of restaurants, the gasoline tax, the cigarette tax, and clean indoor air laws, display many of the expected effects on obesity and explain a substantial amount of its trend. These findings control for individual-level measures of household income, years of formal schooling completed, and marital status.
    JEL: I10 I12
    Date: 2005–08

This nep-hea issue is ©2005 by Yong Yin. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.