nep-hea New Economics Papers
on Health Economics
Issue of 2006‒07‒02
five papers chosen by
Yong Yin
SUNY at Buffalo, USA

  1. Does the Liberalization of Trade Advance Gender Equality in Schooling and Health? By T. Paul Schultz
  2. Is Taking a Pill a Day Good for Health Expenditures? Evidence from a Cross Section Time Series Analysis of 19 OECD Countries from 1970 – 2000 By Verbelen, Bart
  3. Risky Sexual Behavior, Testing and New HIV Treatments By Stephane Mechoulan
  4. Pseudo-Generic Products and Mergers in Pharmaceutical Markets By Martimort, D.; Poudou, J.-C.; Sand-Zantman, W.
  5. Technological Advance and the Growth in Health care Spending By Richard M. H. Suen

  1. By: T. Paul Schultz (Economic Growth Center, Yale University)
    Abstract: This paper assesses the empirical relationship between the liberalization of international trade and the economic status of women. Although historically globalization is not generally linked to the advancement of women, several recent country studies find export led growth in middle and low income countries is associated with improvements in women’s employment opportunities. Does intercountry empirical evidence confirm this association across a wider range of countries, and suggest the mechanisms by which it operates? Measures of wages for men and women are an unreliable basis for study of gender inequality in many low-income countries, and thus schooling and health are analyzed here as indicators of productivity and welfare and gender gaps. For a sample of 70 countries observed at five year intervals from 1965 to 1980, tariff, quota, and foreign exchange restrictions are found to be inversely associated with trade, and with the levels of education and health, especially for women. Natural resource exports, although providing foreign exchange for imports, appear to reduce investments in schooling and health, and delay the equalization of these human capital investments between men and women. Liberalization of trade policy is consequently linked in the cross section to increased trade, to greater accumulation of human capital, and to increased gender equality.
    Keywords: Trade Liberalization, Schooling, Health, Gender Equality
    JEL: I12 J16 I21
  2. By: Verbelen, Bart (CEPS/INSTEAD (IMPALLA))
    Abstract: This paper differs in two ways from previous comparative health system research. First, it focuses on the impact of pharmaceutical expenditures on total health expenditures as trends in pharmaceutical expenditures have been blamed of being a major driver of national health expenditures. In addition to pharmaceutical expenditures, other variables of interest are income, public financing, public delivery, ageing and urbanization. Second, the analysis includes a thorough sensitivity analysis on the proposed model using four samples (with and without the US, and imputed and not imputed data) to address the issue of robustness. Based on a typology of health care systems, trends of relevant explanatory variables are described using OECD Health Data 2003 data. Unlike any other of the variables, pharmaceutical expenditures show contradicting trends when measured as per capita pharmaceutical expenditures and pharmaceutical share of total health expenditures. Next, a regression analysis is performed on data from 1970 – 2000 for 19 OECD countries. Regression diagnostics indicated the absence of multicollinearity but the presence of heteroscedasticity and autocorrelation. Based on the Hausman test, a fixed effect model was chosen. As in all previous empirical research, per capita GDP turned out to be the most influential explanatory variable. While public financing of health care was always three out of four samples significantly inversely related to health expenditures, public delivery as a NHS dummy was always significantly positively related to the dependent variable. Unlike previous research, ageing is consistently and significantly related to higher total health expenditures and, so is urbanization. Finally, all samples show a highly negative relationship between share of pharmaceutical expenditures and health expenditures, suggesting support for the substitution theory.
    Keywords: health care expenditure; health care system ; health economics ; health policy ; comparative
    Date: 2006–05
  3. By: Stephane Mechoulan
    Abstract: This paper studies the impact of new HIV therapies (HAART) on HIV testing and risky sexual behavior. We use data on sexual behavior and testing collected among a high risk population from 1994 to 2002. The evidence reveals a sharp increase in overall risky sexual behavior following the introduction of HAART in late 1996. To confirm causality, we use difference in differences to purge the effect of HAART from other potential concomitant factors. Further, following HAART, testers take more risks (measured by their likelihood to practice unsafe sex) while non testers take fewer risks (measured by their average number of partners). The proportion of testers remains stable, which was ambiguous a priori, and HAART does not seem to alter the composition of the testing and no testing groups.
    Keywords: HAART, ARV, HIV, AIDS, Testing, drug, treatment, UAI, Risk, Partners, contacts, prevalence
    JEL: I18
    Date: 2006–06–22
  4. By: Martimort, D.; Poudou, J.-C.; Sand-Zantman, W.
    Abstract: This article analyzes the optimal contract design between an inventor and a developer. The inventor is privately informed on the value of his idea. The developer must exert some non-verifiable effort to improve the probability of success of this innovation but may also choose to opt out of the relationship upon learning the quality of the idea. While first-best efficiency requires that all marginal returns on innovation be left to the developer, second-best efficiency taking into account this bilateral asymmetric information leads to distort downwards the developer’s incentives to prevent innovators from overstating the value of their ideas. There exists a trade-off between inviting inventor to reveal their ideas and inducing both effort and participation from the developer. The extent of this trade-off depends on the regime of property rights on ideas, i.e., on how easy to steal ideas. Since decreasing the marginal share of developers makes it more difficult to have them participating to the contract, countervailing incentives might sometimes appear. Taking into account those various effects leads to reduce the responsiveness of the contract to the exact value of the idea and might force to give up additional rents to the developer. Some extensions of our framework, including the cases of limited commitment, partial disclosure and double moral hazard, are studied to show the robustness and limits of our previous findings.
    Keywords: Contracts, Innovation, Ideas Stealing, Bilateral Asymmetric Information
    JEL: D82 D86 L24 O31
    Date: 2006
  5. By: Richard M. H. Suen (University of Rochester)
    Abstract: The second half of the twentieth century recorded a rapid growth in health care spending and a significant increase in life expectancy. This paper hypothesizes that the combination of techno-logical progress in medical treatment and rising incomes is the driving force behind these two trends. Using a stochastic, multi-period overlapping-generations model as the analytical vehicle, this paper argues that the rapid growth in medical spending is not driven by factors associated with market structures or insurance opportunities, but instead by factors underlying the production and accumulation of health. According to this model, improvements in medical treatment and rising incomes can explain all of the increase in medical spending and more than 60% of the increase in life expectancy at age 25 during the second half of the twentieth century.
    Keywords: Technological progress, life expectancy, medical spending, health
    JEL: E13 I12 O11 O33
    Date: 2005–11

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