nep-hea New Economics Papers
on Health Economics
Issue of 2006‒06‒24
seven papers chosen by
Yong Yin
SUNY at Buffalo, USA

  1. Can Heterogeneity Of Populations Explain Differences In Mortality? By James W. Vaupel; Roland Rau; Carlo Giovanni Camarda; Kristin G. von Kistowski
  2. Public Health Insurance and SSI Program Participation Among the Aged By Todd Elder; Elizabeth Powers
  3. What Do We Know About Competition and Quality in Health Care Markets? By Martin Gaynor
  4. The Impact of Poor Health on Education: New Evidence Using Genetic Markers By Weili Ding; Steven F. Lehrer; J. Niels Rosenquist; Janet Audrain-McGovern
  5. Health Care Quality, Economic Inequality, and Precautionary Saving By Tullio Jappelli; Luigi Pistaferri; Guglielmo Weber
  6. Mobility, Uncertainty and Subjective Well-being in Hungary By György Molnár; Zsuzsa Kapitány
  7. Conditional cash transfers and indigenous people?s health: Is there a differential impact of Progresa between indigenous and non-indigenous households? By Bando, Rosangela; López-Calva, Luis F.

  1. By: James W. Vaupel (Center for Retirement Research); Roland Rau (PPARC); Carlo Giovanni Camarda (Max Plank Institute for Demographic Rese); Kristin G. von Kistowski
    Abstract: We investigate whether heterogeneity can explain the differences in mortality between the United States and a more homogeneous country, i.e. Japan. The background of the analysis is the growing gap between life-expectancy in the United States and the world record leader since the 1980s. This development is mirrored in the decelerated improvements made against mortality during the last 25 years — especially for women. Our hypothesis is that it is possible to have survival improvements at a steady pace across all population subgroups. The proportion of the population subgroups which perform relatively well decreased over time whereas poor performing subgroups became more important. The consequence of this compositional change since the 1980s would be the observed levelling off in survival improvements on the population level. Since official mortality estimates in the US are of poor quality, we estimate mortality rates via the extinct cohort method using Medicare enrollment data from the Social Security Administration due to their higher quality. If our hypothesis was true, we should see little differences in the development of mortality rates between the best performing subgroups in the United States and Japan. We compared mortality rates between Japanese women and white women in the US from states who (a) either had the highest life expectancy or (b) the highest median household income or (c) the largest gross state product per head. Regardless of the choice of indicator, mortality rates levelled-off in the United States for those best performance subgroups as for the whole population. The preliminary conclusion is therefore that compositional changes (heterogeneity) in the US population can not explain the widening gap between US life expectancy and best practice life expectancy.
    Keywords: Heterogeneity,Mortality, retirement
    Date: 2006–06–14
  2. By: Todd Elder (University of Illinois at Urbana-Champaign); Elizabeth Powers (University of Illinois at Urbana-Champaign)
    Abstract: Previous researchers have noted that the ‘categorical’ Medicaid eligibility accompanying the welfare programs Aid to Families with Dependent Children (AFDC) and Supplemental Security Income (SSI) often far exceeds the value of these programs’ cash benefits. It may be the case that the accompanying health insurance, not the cash benefit, is often the decisive factor in welfare participation. If so, welfare participation should decrease when cash and health insurance benefits are unbundled. We present a simple model of program participation with heterogeneous valuation of health insurance and transaction costs of participation. We evaluate the following four implications of the model: 1) SSI participation declines with the expansion of alternative routes to Medicaid (i.e., noncategorical Medicaid); 2) the availability of noncategorical Medicaid increases Medicaid participation among SSI nonparticipating eligibles; 3) the average SSI benefit collected by welfare recipients is higher when noncategorical Medicaid is available; and 4) the average SSI benefit rejected by nonparticipating SSI eligibles is higher when noncategorical Medicaid is available. Overall, the findings on the model’s testable implications are mixed. The estimates imply strikingly large effects of the presence of alternative routes to Medicaid on both SSI and Medicaid participation, but the results for the hypotheses about SSI benefit amounts are sensitive to controls for recipient characteristics.
    Date: 2006–05
  3. By: Martin Gaynor
    Abstract: The goal of this paper is to identify key issues concerning the nature of competition in health care markets and its impacts on quality and social welfare and to identify pertinent findings from the theoretical and empirical literature on this topic. The theoretical literature in economics on competition and quality, the theoretical literature in health economics on this topic, and the empirical findings on competition and quality in health care markets are surveyed and their findings assessed. Theory is clear that competition increases quality and improves consumer welfare when prices are regulated (for prices above marginal cost), although the impacts on social welfare are ambiguous. When firms set both price and quality, both the positive and normative impacts of competition are ambiguous. The body of empirical work in this area is growing rapidly. At present it consists entirely of work on hospital markets. The bulk of the empirical evidence for Medicare patients shows that quality is higher in more competitive markets. The empirical results for privately insured patients are mixed across studies.
    JEL: I1 L1 L3
    Date: 2006–06
  4. By: Weili Ding; Steven F. Lehrer; J. Niels Rosenquist; Janet Audrain-McGovern
    Abstract: This paper examines the influence of health conditions on academic performance during adolescence. To account for the endogeneity of health outcomes and their interactions with risky behaviors we exploit natural variation within a set of genetic markers across individuals. We present strong evidence that these genetic markers serve as valid instruments with good statistical properties for ADHD, depression and obesity. They help to reveal a new dynamism from poor health to lower academic achievement with substantial heterogeneity in their impacts across genders. Our investigation further exposes the considerable challenges in identifying health impacts due to the prevalence of comorbid health conditions and endogenous health behaviors.
    JEL: I2 I1
    Date: 2006–06
  5. By: Tullio Jappelli (University of Salerno); Luigi Pistaferri (Stanford University); Guglielmo Weber (University of Padua)
    Abstract: We argue that health care quality has an important impact on economic inequality and on saving behaviour. We exploit district-wide variability in health care quality provided by the Italian universal public health system to identify the effect of quality on income inequality, health inequality and precautionary saving. We find that in lower quality districts there is greater income and health dispersion and higher precautionary saving. The analysis carries important insights for the ongoing debate about the validity of the life-cycle model and interesting policy implications for the design of health care systems.
    JEL: D91 D31
    Date: 2006–06
  6. By: György Molnár (Institute of Economics, Hungarian Academy of Sciences); Zsuzsa Kapitány (Institute of Economics, Hungarian Academy of Sciences)
    Abstract: In this paper subjective well-being measured by survey questions on life and material satisfaction is investigated. Our context is Hungary, between 2000 and 2002. We identify some basic variables that have important effect on how individuals perceive well-being in competitive pressure situation, namely, relative income mobility, subjective mobility, relative income position and subjective wealth position. We find that perception of changes in the relative income, wealth, and labour market positions, and the future prospects of these variables effect strongly on subjective well-being. Analysing the deviation between the objective and subjective trends of these variables and the reactions of households under these influences, we find that the objective trends of income and income mobility are very important with respect to satisfaction, but how people perceive their past relative income and income mobility, and their prospect of upward mobility in the future are what really determine satisfaction. The majority of respondents underestimate the real size of changes in their past financial positions, and the uncertainty of the competitive pressure situation is what really leads to this underestimation.
    Keywords: Mobility, Subjective Mobility, Subjective Well-being
    JEL: D12 D63 I31 P36
    Date: 2006–06–13
  7. By: Bando, Rosangela; López-Calva, Luis F. (Tecnológico de Monterrey, Campus Ciudad de México)
    Date: 2005–11

This nep-hea issue is ©2006 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.