nep-hea New Economics Papers
on Health Economics
Issue of 2007‒01‒14
eight papers chosen by
Yong Yin
SUNY at Buffalo, USA

  1. Urban Environmental Health and Sensitive Populations: How Much Are the Italians Willing to Pay to Reduce Their Risks? By Anna Alberini; Aline Chiabai
  2. Can Patient Self-Management Explain the Health Gradient? Goldman and Smith (2002) Revisited By Sudeshna Maitra
  3. Fiscal and Externality Rationales for Alcohol Taxes By Parry, Ian W.H.; Laxminarayan, Ramanan; West, Sarah E.
  4. Tobacco and alcohol: complements or substitutes? : a statistical Guinea Pig approach By Tauchmann, Harald; Göhlmann, Silja; Requate, Till; Schmidt, Christoph M.
  5. The Long-run Effects of HIV/AIDS in Kenya By Bruhns, Ramona
  6. Interview with Kenneth Arrow By Dubra, Juan
  7. Healthcare Reforms in Bulgaria: Towards Diagnosis and Prescription By Pashev, Konstantin
  8. AIDS, freedom and the moral community of citizens in Southern Africa By O'LAUGHLIN, B.

  1. By: Anna Alberini; Aline Chiabai
    Abstract: We use contingent valuation to elicit WTP for a reduction in the risk of dying for cardiovascular and respiratory causes, the most important causes of premature mortality associated with heat wave and air pollution, among the Italian public. The purpose of this study is three-fold. First, we obtain WTP and VSL figures that can be applied when estimating the benefits of heat advisories, other policies that reduce the mortality effects of extreme heat, and environmental policies that reduce the risk of dying for cardiovascular and respiratory causes. Second, our experimental study design allows us to examine the sensitivity of WTP to the size of the risk reduction. Third, we examine whether the WTP of populations that are especially sensitive to extreme heat and air pollution—such as the elderly, those in compromised health, and those living alone and/or physically impaired—is different from that of other individuals. We find that WTP, and hence the VSL, depends on the risk reduction, respondent age (via the baseline risk), and respondent health status. WTP increases with the size of the risk reduction, but is not strictly proportional to it. All else the same, older individuals are willing to pay less for a given risk reduction than younger individuals of comparable characteristics. Poor health, however, tends to raise WTP, so that the appropriate VSL of elderly individuals in poor health may be quite large. Our results support the notion that the VSL is “individuated.â€
    Date: 2006–08
  2. By: Sudeshna Maitra (Department of Economics, York University)
    Abstract: Using the Health and Retirement Study, Goldman and Smith (2002) [“Can patient self-management help explain the SES health gradient?”, PNAS, 99(16), 10929-34] find that poor self-management of health has significant effects on health deterioration and that such poor behavior is less likely to occur among the more educated. They conclude that self-management of health is an explanation for the much-documented positive correlation between education and health outcomes—the education-health gradient. In this paper, I show, using the same data, that controlling for poor self-management behavior has little impact on the education-health gradient, raising doubt about whether such behavior can be said to explain the gradient at all. I also show that Goldman and Smith's results—both the effect of adherence on health and that of education on adherence—depend on how poor self-maintenance behavior is defined. Lastly, using another component of socioeconomic status, viz. resources, I find that a gradient in resources and health does exist, but this too is not impacted much by self-maintenance. These findings cast doubt on whether self-management can explain the gradient in health and socioeconomic status, when the latter is represented by education or resources.
    Keywords: Health gradient, Education, Patient self-management
    JEL: I12 I21
    Date: 2006–11
  3. By: Parry, Ian W.H. (Resources for the Future); Laxminarayan, Ramanan (Resources for the Future); West, Sarah E.
    Abstract: This paper develops and implements an analytical framework for estimating the optimal levels and welfare effects of alcohol taxes and drunk-driver penalties, accounting for externalities and how policies interact with the broader fiscal system. We find that the fiscal component of the optimal alcohol tax exceeds the externality-correcting component under many parameter scenarios and assumptions about revenue recycling; overall, the optimal tax is anything from three to more than ten times the current tax. For more incremental reforms, however, welfare gains from stiffer drunk-driver fines and non-pecuniary penalties are larger, even though they involve implementation costs, possible first-order deadweight losses, and fiscal considerations play a minor role. In contrast to current practice, fiscal considerations warrant relatively heavier taxation of beer and relatively lighter taxation of spirits.
    Keywords: alcohol tax, drunk-driver penalty, fiscal effects, external costs, welfare effects
    JEL: I18 H21 H23
    Date: 2006–11–22
  4. By: Tauchmann, Harald; Göhlmann, Silja; Requate, Till; Schmidt, Christoph M.
    Abstract: The question of whether two drugs – namely alcohol and tobacco – are used as complements or substitutes is of crucial interest if side-effects of anti-drug policies are considered. Numerous papers have empirically addressed this issue by estimating demand systems for alcohol and tobacco and subsequently calculating cross-price effects. However, this traditional approach often is seriously hampered by insufficient price-variation observed in survey data. We, therefore, suggest an alternative instrumental variables approach that statistically mimics an experimental study and does not rely on prices as explanatory variables. This approach is applied to German survey data. Our estimation results suggest that a reduction in tobacco consumption results in a reduction in alcohol consumption, too. It is shown theoretically that this implies that alcohol and tobacco are complements. Hence, we conclude that successful antismoking policies will not result in the unintended side-effect of an increased (ab)use of alcohol.
    Keywords: interdependence in consumption, tobacco and alcohol, instrume variables approach
    JEL: C31 D12 I12
    Date: 2006
  5. By: Bruhns, Ramona
    Abstract: This essay analyzes the long-run economic effects of HIV/AIDS in Kenya, with emphasis on fertility, education and child labor. Human capital, which is built up through formal education and parental child-rearing, is the only input in production. Two aspects are central to the analysis: First, a mature AIDS epidemic causes massive premature adult mortality, thereby destroying existing human capital and reducing the labor force on a large scale. Second, the transmission of human capital to future generations is weakened, as children are left orphaned and surviving adults are correspondingly burdened. As a consequence, per capita income decreases and communities can less afford to raise and educate children as they did before the outbreak of the disease. The underlying theoretical model, in which it is assumed that parents raise and educate children for both financial and altruistic reasons, is calibrated using data for the period 1920 to 2000. The long-run effects of the disease, which depend heavily on parents' expectations about future mortality rates, are estimated for the years 2000-2040. Both human capital and per capita income grow significantly more slowly after the outbreak of the epidemic, while the incidence of child labor doubles for some periods. The level of fertility falls in the immediate aftermath of the outbreak, but can be significantly higher when the epidemic has reached a mature phase, depending on parents' expectations. Governmental interventions in the health sector in the early phase of the epidemic can strongly mitigate its adverse effects.
    Keywords: child labor; growth; fertility; health; epidemic; HIV/AIDS; Kenya;
    JEL: I1 I2 O4 O1
    Date: 2006–11–28
  6. By: Dubra, Juan
    Abstract: Arrow argues that the biggest failures of economic theory are: our failure to explain the business cycle; the missing explanations for the size of fluctuations of prices; our failure to explain the causes of growth and of the spread of innovation. He then discusses several of the existing alternatives to the rational expectations paradigm. He tells the story of his dissertation, and how Koopmans wanted to decline his Nobel Prize.Finally, he discusses health care reform, and malaria in Africa.
    Keywords: Health Care; Business Cycles; Fluctuations.
    JEL: D00 D01 G12 E32 I0
    Date: 2005–03
  7. By: Pashev, Konstantin
    Abstract: The paper studies the policy response to the market failures and challenges of healthcare in transition. Bulgaria chose a halfway shift from healthcare services provided entirely by the state to a system with private providers of outpatient services and public providers of inpatient services, both sectors financed mainly by state-run compulsory payroll insurance system. The paper shows the evolution of this reform path to low compliance by both customers (contributors) and service-providers (contractors with the National Health Insurance Fund), which leads to excessive regulations and control, and crowding out of the private sector. The outcome is a system that is increasingly driven by administrative controls at the expense of market incentives. Based on this analysis it identifies the relevant policy implications and opportunities for moving the stalled health reforms out of the institutional impasse.
    Keywords: healthcare reform
    JEL: I18
    Date: 2006–05
  8. By: O'LAUGHLIN, B.
    Keywords: AIDS; public health; health policy; liberalism; politics; Southern Africa;
    Date: 2006

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