nep-hea New Economics Papers
on Health Economics
Issue of 2007‒03‒17
eight papers chosen by
Yong Yin
SUNY at Buffalo, USA

  1. Why Is The Developed World Obese? By Sara Bleich; David Cutler; Christopher Murray; Alyce Adams
  2. The Effect of Nicotine Replacement Therapy Advertising on Youth Smoking By Henry Saffer; Melanie Wakefield; Yvonne Terry-McElrath
  3. Patient Cost-Sharing, Hospitalization Offsets, and the Design of Optimal Health Insurance for the Elderly By Amitabh Chandra; Jonathan Gruber; Robin McKnight
  4. Social capabilities in Alzheimer’s patients By Antoni Bosch-Domènech; Rosemarie Nagel; Juan Vicente Sánchez-Andrés; Jaume Morera
  5. Health-related Services in Multilateral and Preferential Trade Arrangements in Asia and the Pacific By Mia Mikic
  6. Pensions, Education and Life Expectancy By Michael Gorski; Tim Krieger; Thomas Lange
  7. Testing models of stochastic choice in health state valuation data. By Paul Dolan; Oyeyemi Oluboyede; Jennifer Roberts
  8. Inequality and Health: Is Housing Crowding the Link? By Sholeh A. Maani; Rhema Vaithianathan; Barbara Wolfe

  1. By: Sara Bleich; David Cutler; Christopher Murray; Alyce Adams
    Abstract: Obesity has risen dramatically in the past few decades. However, the relative contribution of energy intake and energy expenditure to rising obesity is not known. Moreover, the extent to which social and economic factors tip the energy balance is not well understood. In this longitudinal analysis of developed countries, we estimate the relative contribution of increased caloric intake and reduced physical activity to obesity using two methods of energy accounting. Results show that rising obesity is primarily the result of consuming more calories. We estimate multivariate regression models and use simulation analysis to explore technological and sociodemographic determinants of this dietary excess. Results indicate that the increase in caloric intake is associated with technological innovations such as reduced food prices as well as changing sociodemographic factors such as increased urbanization and increased female labor force participation. The study findings offer useful insights to future research concerned with the etiology of obesity and may help inform the development of obesity-related policy. In particular, our results suggest that policies to encourage less caloric intake may help reverse past trends in increased consumption.
    JEL: I12 I18
    Date: 2007–03
  2. By: Henry Saffer; Melanie Wakefield; Yvonne Terry-McElrath
    Abstract: This paper examines the effect of nicotine replacement therapy (NRT) advertising on youth smoking. NRT advertising could decrease smoking by informing smokers that the product can make quitting easier and thus inducing more smokers to try and quit. However, a moral hazard is created because NRT advertising increases the expectation that cessation is relatively easy. NRT advertising could thus induce youth to smoke, to smoke more and/or to delay quit attempts. Data from Nielsen Media Research (Nielsen) and the Monitoring the Future Surveys (MTF) have been used in the empirical work. The Nielsen data are matched to the MTF data by month, year and market. The availability of lagged advertising data allow for calculation of an advertising stock variable. The Nielsen data also measure exposure to national advertising on a local level which allows for use of national advertising data. An exogenous shock allows for bypassing problems of endogeneity. The results indicate that NRT advertising has no effect on participation but increases smoking by youth who do smoke. The elasticity of smoking with respect to NRT advertising is about .10 and the elasticity of smoking with respect to price is about -1.03. Since average youth smoking is about 5.77 cigarettes per day, an increase of 10 percent in NRT advertising would increase this average to about 5.82 cigarettes per day. It is also estimated that a ban on NRT advertising would be equivalent to a 10 percent increase in cigarette prices.
    JEL: I18
    Date: 2007–03
  3. By: Amitabh Chandra; Jonathan Gruber; Robin McKnight
    Abstract: Patient cost-sharing for primary care and prescription drugs is designed to reduce the prevalence of moral hazard in utilization. Yet the success of this strategy depends on two factors: the elasticity of demand for those medical goods, and the risk of downstream hospitalizations by reducing access to beneficial health care. Amazingly, we know little about either of these factors for the elderly, the most intensive consumers of health care in our country. We remedy both of these deficiencies by studying a policy change that raised patient cost-sharing for retired public employees in California. We find that physician office visits and prescription drug utilization are very price sensitive; while direct comparison is difficult, the price sensitivity appears to greatly exceed that of the famous RAND Health Insurance Experiment (HIE). Moreover, unlike the HIE, we find large "offset" effects in terms of increased hospital utilization in response to the combination of higher copayments for physicians and prescription drugs. These offset effects are concentrated in patients for whom medical care is presumably efficacious: those with a chronic disease. Finally, we find that the savings from increased cost-sharing accrue mostly to the supplemental insurer, while the costs of increased hospitalization accrue mostly to Medicare; thus, there is a fiscal externality associated with cost-sharing increases by supplemental insurers. Our findings suggest that optimal insurance should be tied to underlying health status, with chronically ill patients facing lower cost-sharing. We also conclude that the externalities to Medicare from supplemental insurance coverage may be more modest than previously suggested due to these offsets.
    JEL: I1
    Date: 2007–03
  4. By: Antoni Bosch-Domènech; Rosemarie Nagel; Juan Vicente Sánchez-Andrés; Jaume Morera
    Abstract: Patients with stage-I (very mild and mild) Alzheimer’s disease were asked to participate in a Dictator Game, a type of game in which a subject has to decide how to allocate a certain amount of money between himself and another person. The game enables the experimenter to examine the influence of social norms and social preferences on the decision-making process. When the results of treatments involving Alzheimer’s disease patients were compared with those of identical treatments involving patients with mild cognitive impairment or healthy control subjects, with similar ages and social backgrounds, no statistically significant difference was found. This finding suggests that stage-I Alzheimer’s disease patients may be as capable of making decisions involving social norms and preferences as other individuals of their age. Whatever brain structures are affected by the disease, they do not appear to influence, at this early stage, the neural basis for cooperation-enhancing social interactions.
    Keywords: Alzheimer patients, social behavior, dictator games
  5. By: Mia Mikic (United Nations Economic and Social Commission for Asia and the Pacific)
    Abstract: In many developing countries, the health-care sector is under-developed, lacking basic infrastructure and human capital, and attracting little attention from investors and policymakers. While encouraging globalization and trade may aggravate those problems and create additional costs in some circumstances, trade liberalization and deeper integration into the global economy could also provide opportunities and resources to address those problems more effectively. This paper contributes to the debate by reporting on the status of liberalization achieved in the health services sector by members of ESCAP through their regional and multilateral trade liberalization commitments.
    Keywords: Health services trade, GATS, TRIPS, Preferential Trade Aggreeemetns, Modes of Services Delivery, ASEAN
    JEL: F13 F15 I19
    Date: 2007–01
  6. By: Michael Gorski (University of Paderborn); Tim Krieger (University of Paderborn); Thomas Lange (Ifo institute for economic research & University of Konstanz)
    Abstract: In a two-period model with agent heterogeneity we analyze a pension reform toward a stronger link between contributions and benefits (as recently observed in several countries) in a pension system with a Bismarckian and a Beveridgian component. We show that such a policy change reduces the educational level in an economy. The life expectancy differential between skilled and unskilled individuals drives this result. Furthermore, we investigate the consequences on the intragenerational redistribution characteristics of the pension system – in the sense of the number of net-recipients relative to net-payers – as well as welfare effects.
    Keywords: social security, education, life expectancy, pension reform, redistribution
    JEL: H55 I21 D39
    Date: 2007–03
  7. By: Paul Dolan; Oyeyemi Oluboyede; Jennifer Roberts (Department of Economics, The University of Sheffield)
    Abstract: Expected Utility (EU) theory is the standard economic model of individual preferences under uncertainty. However, observed violations of the axioms of EU have generated interest in the incorporation of a stochastic element into deterministic models of decision-making. Previous empirical investigation of the theories of stochastic choice has involved monetary gambles in risky conditions using convenience samples of students. The aim of this study is to test generalisations of these models in the context of eliciting the preferences of the general public over health states under conditions of certainty. Our findings lend support to the `white noise´ stochastic specification of Hey and Orme (1994) which indicates that the stronger the preferences of an individual, the less likely they are to make a mistake and attach a lower value to their truly preferred alternative. JEL Classification: D0 Key words: Stochastic preferences, utility assessment, expected utility theory.
    Keywords: Stochastic preferences, utility assessment, expected theory
    JEL: D0
    Date: 2005–11
  8. By: Sholeh A. Maani (The University of Auckland); Rhema Vaithianathan (The University of Auckland); Barbara Wolfe (The University of Wisconsin)
    Abstract: In this study we extend the literature (e.g. Deaton, 2002a; Kennedy and Kawachi, 1996; Wilkinson, 1996) by proposing a new mechanism through which income inequality can influence health. We argue that increased income inequality induces household crowding, which in turn leads to increased rates of infectious diseases. We use data from New Zealand that links hospital discharge rates with community-level characteristics to explore this hypothesis. Our results provide support for a differential effect of income inequality and housing crowding on rates of hospital admissions for infectious diseases among children. Importantly, we find that genetic and non-communicable diseases do not show these joint crowding and inequality effects. The effect of housing on communicable diseases provides a biological foundation for an income inequality gradient.
    Keywords: Housing crowding, child health outcomes, income inequality
    Date: 2006–12

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