nep-hea New Economics Papers
on Health Economics
Issue of 2005‒12‒20
seven papers chosen by
Yong Yin
SUNY at Buffalo, USA

  1. Concerns for Equity and the Optimal Co-Payments for Publicly Provided Health Care By Michael Hoel
  2. The Impact of Parental Income and Education on the Health of their Children By Doyle, Orla; Harmon, Colm; Walker, Ian
  3. Analysis of Health and Longevity in Oldest-Old Population: A Health Capital Approach By Zhong Zhao
  4. Labour Force Participation of the Elderly in Europe: The Importance of Being Healthy By Adriaan Kalwij; Frederic Vermeulen
  5. Capabilities and Equality of Health I By Hans Keiding
  6. Cohort analysis of alcohol consumption: a double hurdle approach By Federico Perali; David Aristei; Luca Pieroni
  7. Mortality Rate and Property Rights in a Model with Human Capital and R&D By Sequeira, Tiago Neves

  1. By: Michael Hoel
    Abstract: In countries where health care is publicly provided and where equity considerations play an important role in policy decisions, it is often argued that an increase in co-payments is unacceptable as it will be particularly harmful to the less well-off in society. The present paper derives socially optimal co-payments in a simple model of health care where people differ in income and in severity of illness. The social optimum depends on the welfare weights given to persons with different levels of expected utility. Increased concern for equity may increase optimal co-payments for illnesses with homogeneous severity across the population. For illnesses where the severity varies strongly across the population, optimal co-payments go down as a response to increased concern for equity, provided income differences in the society are sufficiently small.
    Keywords: public health, co-payments, equity concerns
    JEL: D63 H42 H51 I18
    Date: 2005
  2. By: Doyle, Orla; Harmon, Colm; Walker, Ian
    Abstract: This paper investigates the robustness of recent findings on the effect of parental background on child health. We are particularly concerned with the extent to which their finding that income effects on child health are the result of spurious correlation rather than some causal mechanism. A similar argument can be made for the effect of education - if parental education and child health are correlated with some common unobservable (say, low parental time preference) then least squares estimates of the effect of parental education will be biased upwards. Moreover, it is very common for parental income data to be grouped, in which case income is measured with error and the coefficient on income will be biased towards zero and there are good reasons why the extent of bias may vary with child age. Fixed effect estimation is undermined by measurement error and here we adopt the traditional solution to both spurious correlation and measurement error and use an instrumental variables approach. Our results suggest that the income effects observed in the data are spurious.
    Keywords: child health; intergenerational transmission
    JEL: I1
    Date: 2005–11
  3. By: Zhong Zhao (IZA Bonn and CCER, Peking University)
    Abstract: Using 2002 cross-sectional data and 1998, 2000, 2002 three waves of panel data from the Chinese Longitudinal Healthy Longevity Survey, we study health in oldest old population. We measure health using the Katz Index of Activities of Daily Living (ADL) and in term of mortality. Our results suggest that besides aging, there are other important factors contributing to bad health both in term of the Index of ADL and mortality. Effects of gender on the Index of ADL and on mortality are different. Female tends to be more dependent in daily living, but has higher probability to survive. Oldest-olds living in urban area are also more dependent, but are less likely to die. Socioeconomic status such as financial resources, education level of the oldest-old and of his/her spouse and etc. plays insignificant role in the health of oldest-old. Oldest-olds still in marriage are more independent in daily living and are more likely to survive. There exists reverse causality between health and risky behaviors. After controlled for simultaneity bias by instrumental variable method, the coefficients of risk behaviors are consistent with theory and common wisdom.
    Keywords: oldest-old, mortality, Katz index of ADL, Grossman model
    JEL: I12 J14 I18
    Date: 2005–12
  4. By: Adriaan Kalwij (Utrecht University and IZA Bonn); Frederic Vermeulen (Tilburg University, Netspar, CentER and IZA Bonn)
    Abstract: In this paper we study labour force participation behaviour of individuals aged 50-64 in 11 European countries. The data are drawn from the new Survey of Health, Ageing and Retirement in Europe (SHARE). The empirical analysis shows that health is multidimensional, in the sense that different health indicators have their own significant impact on individuals’ participation decisions. Health effects differ markedly between countries. A counterfactual exercise shows that improved health conditions may yield over 10 percentage points higher participation rates for men in countries like Austria, Germany and Spain, and for females in the Netherlands and Sweden. Moreover, we show that the declining health condition with age accounts considerably for the decline in participation rates with age.
    Keywords: SHARE, labour force participation, health, retirement
    JEL: I10 J22 J26
    Date: 2005–12
  5. By: Hans Keiding (Department of Economics, University of Copenhagen)
    Abstract: The concept of capabilities, introduced originally by Sen with the aim to provide a better basis for the theory of inequality, has inspired many researchers but has not found any simple formal representation which might be instrumental in the construction of a comprehensive theory of equality. In the present paper, we present a formalization of the concept of capabilities based on Lancasterian characteristics, whereby a functioning of an individual is a method for transforming an initial position to a final outcome. In this context, we investigate whether preferences over capabilities as sets of functionings can be rationalized by maximization of a suitable utility function over the set of functionings. Such a rationalization turns out to be possible only in cases which must be considered exceptional and which do not allow for interesting applications of the capability approach to questions of health or equality. The conclusion which can be obtained from the predominantly negative results is that a formal description of capabilities much involve ideas which go beyond the simple representation as a family of choice sets.
    Keywords: capabilities; characteristics; equality of health
    JEL: D63 I10
    Date: 2005–11
  6. By: Federico Perali; David Aristei; Luca Pieroni
    Abstract: This paper describes the life-cycle alcohol consumption patterns of Italian households by decomposing gender, cohort, age and time effects and estimates the importance of demographic characteristics using a double hurdle model. The application is based on ISTAT households expenditure survey for the period 1997-2002 organized in cohorts. As expected, cohort and age effects are significant in both participation and consumption. The significance of gender and geographic differences suggests interesting policy implications.
    Keywords: Alcohol consumption, double-hurdle models, birth cohorts, ageing, gender
    JEL: D12 I12 J10
    Date: 2005–05
  7. By: Sequeira, Tiago Neves
    Abstract: We use a set of established growth models, which simultaneously include human capital and R&D, to show that the effect of mortality rate in human capital accumulation is quantitatively more important than the effect of perfectly guaranteed patents on research. First, we show that the effect of mortality rate on human capital accumulation productivity may explain differences in growth paths and development levels across countries, accounting for the main features of economic development of the industrialized world in the last two centuries. Then, we explicitly compare the two types of expropriation (mortality rate and uncertainty in property rights).
    Keywords: Institutions, Incentives, Economic Growth, Economic Development, Industrial Revolutions
    JEL: O10 O11 O17 P14
    Date: 2004

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