nep-hea New Economics Papers
on Health Economics
Issue of 2006‒09‒16
four papers chosen by
Yong Yin
SUNY at Buffalo, USA

  1. Estimates of Own Lethal Risks and Anchoring Effects By Olivier Armantier
  2. Social dynamics of obesity By Mary Burke; Frank Heiland
  3. Smoking Habits: Like Father, Like Son, Like Mother, Like Daughter By Maria L. Loureiro; Anna Sanz-de-Galdeano; Daniela Vuri
  4. The Effect of State Community Rating Regulations on Premiums and Coverage in the Individual Health Insurance Market By Bradley Herring; Mark V. Pauly

  1. By: Olivier Armantier
    Abstract: The paper reports on an experiment testing whether agents perceive correctly the lethal risks they face personally. The results suggest that subjects exhibit comparable biases when making predictions for their own-age-cohort, or for the entire population (i.e. agents overestimate rare risks, and under-estimate common risks). The hypothesis that agents have better knowledge of their own risks, however, cannot be dismissed entirely, as responses in the own-age-cohort survey are more homogenous and better ordered. Finally, it is shown that administering surveys in succession can generate anchoring effects, which may explain why our conclusions differ markedly from a previous study. <P>Ce papier rapporte les résultats d’une expérience qui cherchait à tester si les individus percevaient correctement les risques mortels auxquels ils font face personnellement. Les résultats suggèrent que la perception des sujets est autant biaisée lorsqu'ils font des prédictions pour leur propre groupe d'âge ou pour la population entière (c'est-à-dire que les individus surestiment les risques rares, et sous-estiment les risques les plus communs). Cependant, l'hypothèse que les individus possèdent une meilleure connaissance de leurs propres risques ne peut être écartée complètement puisque les réponses du sondage sur leur propre groupe d'âge sont plus homogènes et mieux ordonnées. Finalement, nous démontrons que l'administration des sondages en série a pu générer des effets d’ancrage (anchoring effects) qui pourraient expliquer le fait que nos conclusions diffèrent sensiblement d'une étude précédente.
    Keywords: anchoring, health and safety hazard, rational expectation, risks perception, effet d’ancrage, espérance rationnelle, perception des risques, risques pour la santé et la sécurité
    JEL: D8 C9
    Date: 2006–09–01
  2. By: Mary Burke; Frank Heiland
    Abstract: In order to explain the substantial recent increases in obesity rates in the United States, we consider the effect of falling food prices in the context of a model involving endogenous body weight norms and an explicit, empirically grounded description of human metabolism. Unlike previous representative agent models of price-induced gains in average weight, our model, by including metabolic heterogeneity, is able to capture changes in additional features of the distribution, such as the dramatic growth in upper-quartile weights that are not readily inferred from the representative agent setting. We calibrate an analytical choice model to American women in the 30-to-60-year-old age bracket and compare the model’s equilibrium weight distributions to data from NHANES surveys spanning (intermittently) the period from 1976 through 2000. The model predicts increases in average weight and obesity rates with considerable accuracy and captures a considerable portion of the relative growth in upperquantile weights. The differential response to price declines across the distribution depends on the fact that human basal metabolism (or resting calorie expenditure) is increasing and yet concave in body weight, and therefore food price effects on weight tend to be larger for individuals who are heavier initially. The lagged adjustment of weight norms helps to explain recent observations that obesity rates have continued to rise since the mid 1990s, despite an apparent leveling off of price declines. The predicted increase in body weight aspirations agrees with an observed trend in self-reported desired weights, and it defies the conventional wisdom that thinness has been a growing obsession among American women in recent decades.
    Keywords: Food prices ; Obesity
    Date: 2006
  3. By: Maria L. Loureiro (IDEGA, University of Santiago de Compostela); Anna Sanz-de-Galdeano (University of Girona and IZA Bonn); Daniela Vuri (University of Florence, CHILD and IZA Bonn)
    Abstract: We analyze data from the 1994-2002 waves of the British Household Panel Survey to explore the influence of parental smoking habits on their children’s smoking decisions. In order to account for the potential endogeneity of parental smoking habits we use instrumental variable methods. We find that mothers play a crucial role in determining their daughters’ smoking decisions, while fathers’ smoking habits are transmitted primarily to their sons.
    Keywords: youth smoking, intergenerational habit transmission, multivariate probit, instrumental variables
    JEL: I1 C5
    Date: 2006–08
  4. By: Bradley Herring; Mark V. Pauly
    Abstract: Some states have implemented community rating regulations to limit the extent to which premiums in the individual health insurance market can vary with a person�s health status. Community rating and guaranteed issues laws were passed with hopes of increasing access to affordable insurance for people with high-risk health conditions, but there are concerns that these laws led to adverse selection. In some sense, the extent to which these regulations ultimately affected the individual market depends in large part on the degree of risk segmentation in unregulated states. In this paper, we examine the relationship between expected medical expenses, individual insurance premiums, and the likelihood of obtaining individual insurance using data from both the National Health Interview Survey and the Community Tracking Study Household Survey. We test for differences in these relationships between states with both community rating and guaranteed issue and states with no such regulations. While we find that people living in unregulated states with higher expected expense due to chronic health conditions pay modestly higher premiums and are somewhat less likely to obtain coverage, the variation between premiums and risk in unregulated individual insurance markets is far from proportional; there is considerable pooling. In regulated states, we find that there is no effect of having higher expected expense due to chronic health conditions on neither premiums nor coverage. Overall, our results suggest that the effect of regulation is to produce a slight increase in the proportion uninsured, as increases in low risk uninsureds more than offset decreases in high risk uninsureds. Community rating and guaranteed issue regulations produce only small changes in risk pooling because the extent of pooling in the absence of regulation is substantial.
    JEL: I11 I18 I19
    Date: 2006–08

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