nep-hea New Economics Papers
on Health Economics
Issue of 2006‒05‒06
four papers chosen by
Yong Yin
SUNY at Buffalo, USA

  1. Explorations of the Effect of Experience on Preferences: Two Health-Care Case Studies By Neuman, Shoshana; Neuman, Einat
  2. Migration and Mental Health: Evidence from a Natural Experiment By Steven Stillman; David McKenzie; John Gibson
  3. Asymmetric Information from Physician Agency: Optimal Payment and Healthcare Quantity By Philippe Chon´e; Ching-to Albert Ma
  4. The Demand for Outpatient Medical Care in Rural Kenya By Randell P. Ellis; Germano M. Mwabu

  1. By: Neuman, Shoshana; Neuman, Einat
    Abstract: The standard assumption in economic theory is that preferences are stable. In particular, they are not changed as a result of experience with the good/service/event. Behavioral scientists have challenged this assumption and claimed (providing evidence) that preferences are constantly changing when experience is accumulated. This paper tests the effect of experience on preferences for attributes of health-care events. We are using two very different samples and a methodology that facilitates the estimation of marginal utilities of various attributes of a composite non-traded health-care service. Discrete Choice Experimental design is employed for the analysis of samples of (1) women who gave birth, and (2) women who were diagnosed with breast cancer. For each group we had information on experience. In the case of women who gave birth, the sample was decomposed into 3 sub-samples: pregnant women with their first child (no experience); women after one delivery (single experience); and mothers after more than one delivery (multiple experience). Preferences of the 3 sub-groups have then been compared. The breast cancer patients reported the number of chemotherapy/radiation treatments they have already received, thus enabling the construction of an experience variable and testing for the effect of experience on preferences. The basic finding is that preferences for health-care attributes are significantly changed as a result of experience with the health event. However, the amount of experience is irrelevant.
    Keywords: breast cancer; delivery; Discrete Choice Experiment; experience; health-care; preferences
    JEL: D1 D12 I19
    Date: 2006–04
  2. By: Steven Stillman (Motu Economic and Public Policy Research); David McKenzie (Development Research Group, The World Bank); John Gibson (University of Waikato)
    Abstract: Measuring the gain in income from migration is complicated by non-random selection of migrants from the general population, making it hard to obtain an appropriate comparison group of non-migrants. This paper uses a migrant lottery to overcome this problem, providing an experimental measure of the income gains from migration. New Zealand allows a quota of Tongans to immigrate each year with a lottery used to choose amongst the excess number of applicants. A unique survey conducted by the authors in these two countries allows experimental estimates of the income gains from migration to be obtained by comparing the incomes of migrants to those who applied to migrate, but whose names were not drawn in the lottery, after allowing for the effect of non-compliance among some of those whose names were drawn. We also conducted a survey of individuals who did not apply for the lottery. Comparing this non-applicant group to the migrants enables assessment of the degree to which non-experimental methods can provide an unbiased estimate of the income gains from migration. We find evidence of migrants being positively selected in terms of both observed and unobserved skills. As a result, non-experimental methods are found to overstate the gains from migration, by 9 to 82 percent. A good instrumental variable works best, while difference-in-differences and bias-adjusted propensity-score matching also perform comparatively well.
    Keywords: migration; mental health; natural experiment
    JEL: F22 I12 J61
    Date: 2006–03–31
  3. By: Philippe Chon´e (CREST-LEI); Ching-to Albert Ma (Department of Economics, Boston University)
    Abstract: We model asymmetric information arising from physician agency, and its effect on the design of payment and healthcare quantity. The physician-patient coalition aims to maximize a combination of physician profit and patient benefit. The degree of substitution between profit and patient benefit in the physician-patient coalition is the physician’s private information, as is the patient’s intrinsic valuation of treatment quantity. The equilibrium mechanism depends only on the physician-patient coalition parameter. Moreover, the equilibrium mechanism exhibits extensive pooling, with prescribed quantity and payment being insensitive to the agency characteristics or patient’s actual benefit. The optimal mechanism is interpreted as managed care where strict approval protocols are placed on treatments.
    Keywords: Physician Agency, Altruism, Optimal Payment, Healthcare Quantity, Managed Care
    JEL: D82 I1 I10 L15
    Date: 2006–02
  4. By: Randell P. Ellis (Institute for Economic Development, Boston University); Germano M. Mwabu (University of Nairobi, Kenya)

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