nep-hea New Economics Papers
on Health Economics
Issue of 2006‒12‒09
eleven papers chosen by
Yong Yin
SUNY at Buffalo, USA

  1. Estimating and modeling the proportion cured of disease in population-based cancer studies By Paul C. Lambert
  2. Research Note: Assessing Household Service Losses with Joint Survival Probabilities By Victor Matheson; Robert Baade
  3. (M)oral Hazard? By Grönqvist, Erik
  4. Inequality in Individual Mortality and Economic Conditions Earlier in Life By Gerard J. van den Berg; Maarten Lindeboom; Marta López
  5. Can Subjective Mortality Expectations and Stated Preferences Explain Varying Consumption and Saving Behaviors among the Elderly? By Martin Salm
  6. The Long Run Health and Economic Consequences of Famine on Survivors: Evidence from China’s Great Famine By Xin Meng; Nancy Qian
  7. A Dynamic Model of Demand for Private Health Insurance in Ireland By Claire Finn; Colm Harmon
  8. Long-run and short-run constraints in the access to private health care services: evidence from selected european countries By Massimo Baldini; Gilberto Turati
  9. Welfare or Farewell? Mental health and stress in the workplace By Heather Rolfe; Jim Foreman; Tylee, A.
  10. Incidence-based Estimates of Healthy Life Expectancy for the United Kingdom: Coherence between Transition Probabilities and Aggregate Life Tables By Martin Weale; Ehsan Khoman
  11. A General Equilibrium Analysis of Annuity Rates in the Presence of Aggregate Mortality Risk By Martin Weale; Justin van de Ven

  1. By: Paul C. Lambert (Centre for Biostatistics & Genetic Epidemiology, University of Leicester)
    Abstract: In population-based cancer studies, cure is said to occur when the mortality (hazard) rate in the diseased group of individuals returns to the same level as that expected in the general population. The cure fraction (the proportion of patients cured of disease) is of interest to patients and a useful measure to monitor trends in survival of curable disease. I will describe two types of cure model, namely, the mixture and nonmixture cure model (Sposto 2002); explain how they can be extended to incorporate the expected mortality rate (obtained from routine data sources); and discuss their implementation in Stata using the strsmix and strsnmix commands. In both commands there is the choice of parametric distribution (Weibull, generalized gamma, and log–logistic) and link function for the cure fraction (identity, logit, and log(–log)). As well as modeling the cure fraction it is possible to include covariates for the ancillary parameters for the parametric distributions. This ability is important, as it allows for departures from proportional excess hazards (typical in many population-based cancer studies). Both commands incorporate delayed entry and can therefore be used to obtain up-to-date estimates of the cure fraction by using period analysis (Smith et al. 2004). There is also an associated predict command that allows prediction of the cure fraction, relative survival, and the excess mortality rate with associated confidence intervals. For some cancers the parametric distributions listed above do not fit the data well, and I will describe how finite mixture distributions can be used to overcome this limitation. I will use examples from international cancer registries to illustrate the approach.
    Date: 2006–09–18
  2. By: Victor Matheson (Department of Economics, College of the Holy Cross); Robert Baade (Department of Economics and Business, Lake Forest College)
    Abstract: Traditional analyses of household service losses in personal injury and wrongful death litigation calculate the losses over the expected lifetime of the injured or deceased individual. In fact, the losses to the surviving family members are more accurately described by using joint survival probabilities of the injured or deceased person and their survivors, or a “joint life expectancy.” The use of joint probabilities will always serve to reduce expected household service losses and these reductions can be especially significant when the deceased is significantly younger than the surviving spouse or if the survivor has a relatively low remaining life expectancy.
    Keywords: forensic economics, household services
    JEL: K13 K41
    Date: 2006–12
  3. By: Grönqvist, Erik (Dept. of Economics, Stockholm School of Economics)
    Abstract: Would you go to the dentist more often if it were free? Observational data is here used to analyze the impact of full-coverage insurance on dental care utilization using different identification strategies. The challenge of assessing the bite of moral hazard without an experimental study design is to separate it from adverse selection, as agents act on private and generally unobservable information. By utilizing a quasi-experimental feature of the insurance scheme the moral hazard effect is identified on observables, and by having access to an instrument the effect is identified with IV. Moral hazard is assessed using both difference-in-differences and cross-sectional estimations.
    Keywords: Asymmetric information; Moral Hazard; Health Insurance; Porpensity Score Matching; IV
    JEL: D82 G22 I11
    Date: 2006–11–28
  4. By: Gerard J. van den Berg (Free University Amsterdam, Princeton University,IFAU Uppsala, Netspar, CEPR, IFS and IZA Bonn); Maarten Lindeboom (Free University Amsterdam, Netspar, University of Bergen, Tinbergen Institute and IZA Bonn); Marta López (Free University Amsterdam)
    Abstract: We analyze the effect of being born in a recession on the mortality rate later in life in conjunction with social class. We use individual data records from Dutch registers of birth, marriage, and death certificates, covering the period 1815-2000, and we merge these with historical data on macro-economic outcomes and health indicators. We estimate duration models and inequality measures. The results indicate that being born in a recession increases the mortality rate later in life for most of the population. Lower social classes suffer disproportionally from being born in recessions. This exacerbates mortality inequality. This is not affected by social mobility: upward mobility does not vary much with the business cycle at birth. It turns out that the average long-run economic well-being of the family at birth, the transitory economic shocks at birth, and their interaction, are all relevant determinants of the mortality rate throughout the whole life.
    Keywords: death, longevity, recession, life expectancy, lifetimes, social inequality, social class
    JEL: I12 J14 E32 N33 N13 C41
    Date: 2006–11
  5. By: Martin Salm (MEA, University of Mannheim)
    Abstract: This study investigates how subjective mortality expectations and heterogeneity in time and risk preferences affect the consumption and saving behavior of the elderly. Previous studies find that the large wealth disparities observed among the elderly cannot be explained by differences in preferences. In contrast, this study identifies a strong relationship between answers to survey questions about time and risk preferences and consumption and saving behaviors. This paper uses data on information about preferences and subjective mortality expectations from the Health and Retirement Study merged with detailed consumption data from two waves of the Consumption and Activities Mail Survey. The main results are: 1) consumption and saving choices vary with subjective mortality rates in a way that is consistent with the life cycle model; 2) different answers to survey questions about time and risk preferences reflect differences in actual saving and consumption behavior; and 3) there is substantial heterogeneity in estimated time discount rates and risk aversion parameters.
    Keywords: preferences, mortality expectations, saving decisions
    JEL: D81 D91 J14
    Date: 2006–11
  6. By: Xin Meng (Australian National University and IZA Bonn); Nancy Qian (Brown University)
    Abstract: In the past century, more people have perished from famine than from the two World Wars combined. Many more were exposed to famine and survived. Yet we know almost nothing about the long run impact of famine on these survivors. This paper addresses this question by estimating the effect of childhood exposure to China’s Great Famine on adult health and labor market outcomes of survivors. It resolves two major empirical difficulties: 1) data limitation in measures of famine intensity; and 2) the potential joint determination of famine occurrences and survivors’ outcomes. As a measure of famine intensity, we use regional cohort size of the surviving population in a place and time when there is little migration. We then exploit a novel source of plausibly exogenous variation in famine intensity to estimate the causal effect of childhood exposure to famine on adult health, educational attainment and labor supply. The results show that exposure to famine had significant adverse effects on adult health and work capacity. The magnitude of the effect is negatively correlated with age at the onset of the famine. For example, for those who were one year old at the onset of the famine, exposure on average reduced height by 2.08% (3.34cm), weight by 6.03% (3.38kg), weight-for-height by 4% (0.01 kg/cm), upper arm circumference by 3.95% (0.99cm) and labor supply by 6.93% (3.28 hrs/week). The results also suggest that famine exposure decreased educational attainment by 3% (0.19 years); and that selection for survival decreased withinregion inequality in famine stricken regions.
    Keywords: health, education, famine, China
    JEL: I10 I2 J1
    Date: 2006–11
  7. By: Claire Finn (University College Dublin); Colm Harmon (University College Dublin and IZA Bonn)
    Abstract: The Irish health care system offers a tax financed, universal entitlement to public care at a nominal user fee, nonetheless 50% of the Irish population purchase private health insurance. This paper empirically models the propensity to insure as a function of individual and household characteristics using panel data analysis and compares three alternate approaches; a static, chamberlain-mundlak and dynamic specification. Using panel data from 1994 to 2000, we consider whether propensity to insure is in fact a function of heterogeneity or of state dependence. A range of individual and household characteristics is shown to influence propensity to insure. Overall the positive effect of education and income and the negative effect of poor health status remain robust across three specifications. In moving toward a dynamic specification, we show that persistence is a highly significant determinant of demand for private health insurance and also that it reduces the size of the coefficients on the regressors. The latter point highlights that while education, income and, to a lesser extent, health status have very large effects on probability of insuring, these effects are overestimated where no attempt is made to control for unobserved heterogeneity or state dependence.
    Keywords: health insurance, dynamics, panel, unobserved heterogeneity, state dependence
    JEL: G22 I10 D01
    Date: 2006–11
  8. By: Massimo Baldini; Gilberto Turati
    Abstract: This paper aims at distinguishing long-run and short-run constraints in the access to private health care services. To this end, we apply the methodology proposed by Carneiro and Heckman (2003) to the SHARE database, a survey conducted in a number of European countries, involving some 22,000 individuals over the age of 50. Micro-data includes information on health and health consumption, and socioeconomic variables (like income and wealth). Our results show that the problem of short-run constraints in the access to private health care services could be real, especially in Italy, Greece, and to some extent Spain. Moreover, there appear to be differences in the role of credit constraints, both considering more specific services, and gender differences.
    Keywords: health inequalities, private health care services, credit constraints, family background
    JEL: D31 I10 I31
    Date: 2006–11
  9. By: Heather Rolfe; Jim Foreman; Tylee, A.
    Abstract: Mental health problems, including stress, account for a high proportion of sickness absence and result in loss of employment. The paper presents findings from a recent qualitative research study into employers’ policies and practices in relation to mental health and stress. A number of problems are identified in how employers perceive mental health, particularly in the distinction between ‘home’ and ‘work-based’problems and in how it is dealt with. These include managers’ skills in dealing with mental health issues and in the availability of help, such as counselling. The paper identifies a range of measures which would improve current practice. These are seen to have wider benefits in improving employee well-being more generally.
    Date: 2006–02
  10. By: Martin Weale; Ehsan Khoman
    Abstract: Will the United Kingdom’s ageing population be fit and independent, or suffer from greater chronic ill health? Healthy life expectancy is commonly used to assess this: it is an estimate of how many years are lived in good health over the lifespan. This paper examines a means of generating estimates of healthy and unhealthy life expectancy consistent with exogenous population mortality data. The method takes population transition matrices and adjusts these in a statistically coherent way so as to render them consistent with aggregate life tables. It is applied to estimates of healthy life expectancy for the United Kingdom.
    Date: 2006–04
  11. By: Martin Weale; Justin van de Ven
    Abstract: This paper explores the pricing of annuities in a structural overlapping generations model in which the mortality rate of people when old is uncertain. A market clearing price for annuities is established below the fair price. At this price the willingness of old people to pay the young to carry old people’s aggregate mortality risk is balanced by the willingness of the young to bear the risk. The model suggests that aggregate mortality risk is unlikely to be a major influence on annuity pricing.
    Date: 2006–10

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