nep-hea New Economics Papers
on Health Economics
Issue of 2006‒12‒22
seven papers chosen by
Yong Yin
SUNY at Buffalo, USA

  1. Lowering Child Mortality in Poor Countries: The Power of Knowledgeable Parents By P Boone; Zhaoguo Zhan
  2. Fat City: The Relationship Between Urban Sprawl and Obesity By Jean Eid; Henry G. Overman; Diego Puga; Matthew Turner
  3. The Depression Report: A New Deal for Depression and Anxiety Disorders By Richard Layard & CEP Mental Health Policy Group
  4. When The Nest Egg Cracks: Financial Consequences Of Health Problems, Marital Status Changes, And Job Layoffs At Older Ages By Richard W. Johnson; Gordon B.T. Mermin; Cori E. Uccello
  5. Does Increased Access Increase Equality? Gender and Child Health Investments in India By Emily Oster
  6. Is Drug Coverage a Free Lunch? Cross-Price Elasticities and the Design of Prescription Drug Benefits By Martin Gaynor; Jian Li; William B. Vogt
  7. Health Insurance and Ex Ante Moral Hazard: Evidence from Medicare By Dhaval Dave; Robert Kaestner

  1. By: P Boone; Zhaoguo Zhan
    Abstract: Why do over 20% of children die in some poor countries, while in others only 2% die? Weexamine this question using survey data covering 278,000 children in 45 low-income countries.We find that parents' education and a mother's propensity to seek out modern healthcare areempirically important when explaining child survival, while the prevalence of common diseases,along with infrastructure such as improved water and sanitation, are not. Using a GINIcoefficient we construct for treatment services, we find that public and private health systems are"equally unequal", that is, both tend to favor children in relatively well-off households, andneither appears superior at improving outcomes in very poor communities. These facts contrastwith a common view that a much-expanded public health sector is necessary to reduce childmortality. Instead, we believe the empirical evidence points to the essential role of parents asadvocates for their child's health. If we can provide better health knowledge and generaleducation to parents, a private healthcare sector can arise to meet demand. We provide evidencethat this alternative route to low mortality is indeed a reason behind the current success of manycountries with low child mortality, including Vietnam, Indonesia, Egypt, and the Indian state ofKerala. Finally, we calculate a realistic package of interventions that target education, healthknowledge and treatment seeking could reduce child mortality by 32%.
    JEL: I00 I1 I12 I18
    Date: 2006–10
  2. By: Jean Eid; Henry G. Overman; Diego Puga; Matthew Turner
    Abstract: We study the relationship between urban sprawl and obesity. Using data that tracks individuals over time, we find no evidence that urban sprawl causes obesity. We show that previous findings of a positive relationship most likely reflect a failure to properly control for the fact the individuals who are more likely to be obese choose to live in more sprawling neighborhoods. Our results indicate that current interest in changing the built environment to counter the rise in obesity is misguided.
    Keywords: Urban sprawl, obesity, selection effects
    JEL: I12 R14
    Date: 2006–11
  3. By: Richard Layard & CEP Mental Health Policy Group
    Keywords: Depression, mental health
    Date: 2006–06
  4. By: Richard W. Johnson (Urban Institute); Gordon B.T. Mermin (Urban Institute); Cori E. Uccello (
    Abstract: The risk of falling into poor health, losing the ability to work or live independently, becoming widowed, and experiencing other negative events that threaten financial security increase with age. This report computes the incidence of these negative events at older ages and examines their impact on economic well-being. Over a 10-year period, more than three-quarters of adults age 51 to 61 at the beginning of the period experience job layoffs, widowhood, divorce, new health problems, or the onset of frailty among parents or in-laws. More than two-thirds of adults age 70 and older experience at least one negative shock over a nine-year period. Incidence rates are even higher at the household level for married people, who face the added risk that their spouses could develop health problems or lose their jobs. Financial consequences are especially serious for older adults who develop work disabilities or long-term care needs, or who become unemployed.
    Keywords: nest eggs, retirement risk, social security, umemployed
    Date: 2006–06–22
  5. By: Emily Oster
    Abstract: Policymakers often argue that increasing access to health care is one crucial avenue for decreasing gender inequality in the developing world. Although this is generally true in the cross section, time series evidence does not always point to the same conclusion. This paper analyzes the relationship between access to child health investments and gender inequality in those health investments in India. A simple theory of gender-biased parental investment suggests that gender inequality may actually be non-monotonically related to access to health investments. At low levels of availability, investment in girls and boys is low but equal; as availability increases, boys get investments first, creating inequality. As availability increases further, girls also receive investments and equality is restored. I test this theory using data on the relationship between gender balance in vaccinations and the availability of "Health Camps" in India. I find support for a non-monotonic relationship. This result may shed light on the contrast between the cross-sectional and time-series evidence on gender and development, and may provide guidance for health policy in developing countries.
    JEL: I18 J13 J16 O12
    Date: 2006–12
  6. By: Martin Gaynor; Jian Li; William B. Vogt
    Abstract: Recently, many US employers have adopted less generous prescription drug benefits. In addition, the U.S. began to offer prescription drug insurance to approximately 42 million Medicare beneficiaries in 2006. We use data on individual health insurance claims and benefit data from 1997-2003 to study the effects of changing consumers' co-payments for prescription drugs on the quantity demanded and expenditure on prescription drugs, inpatient care and outpatient care. We allow for effects both in the year of the co-payment change and in the year following the change. Our results show that increases in prescription drug prices reduce both the use of and spending on prescription drugs. However, consumers substitute the use of outpatient care and inpatient care for prescription drug use, and the expenditure reductions on prescription drugs are largely offset by the increases in other spending.
    JEL: D12 I10 M50
    Date: 2006–12
  7. By: Dhaval Dave; Robert Kaestner
    Abstract: Basic economic theory suggests that health insurance coverage may cause a reduction in prevention activities, but empirical studies have yet to provide evidence to support this prediction. However, in other insurance contexts that involve adverse health events, evidence of ex ante moral hazard is more consistent. In this paper, we extend the analysis of the effect of health insurance on health behaviors by allowing for the possibility that health insurance has a direct (ex ante moral hazard) and indirect effect on health behaviors. The indirect effect works through changes in health promotion information and the probability of illness that may be a byproduct of insurance-induced greater contact with medical professionals. We identify these two effects and in doing so identify the pure ex ante moral hazard effect. This study exploits the plausibly exogenous variation in health insurance as a result of obtaining Medicare coverage at age 65. We find limited evidence that obtaining health insurance reduces prevention and increases unhealthy behaviors among elderly persons. There is more robust evidence that physician counseling is successful in changing health behaviors.
    JEL: I12 I18
    Date: 2006–12

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