nep-hea New Economics Papers
on Health Economics
Issue of 2007‒04‒09
28 papers chosen by
Yong Yin
SUNY at Buffalo, USA

  1. Biased Risk Perceptions of Longevity and Disability in Old Age By Joan Costa Font
  2. Co-payment systems in health care: between moral hazard and risk reduction By Ed Westerhout; Kees Folmer
  3. Longitudinal Study on the Performance of U.S. Pharmaceutical Firms: The Increasing Role of Marketing By Pattikawa, L.H.
  4. Income Risk and Health By Timothy J. Halliday
  5. Deregulating the Norwegian Pharmaceuticals Market - Consequences for Costs and Availability By Rudholm, Niklas
  6. Management of Blood Transfusion Services in India: An Illustrative Study of Maharashtra and Gujarat States By Ramani K.V.; Mavalankar Dileep; Govil Dipti
  7. The Value of a Statistical Life: a Meta-Analysis with a Mixed Effects Regression Model By François Bellavance; Georges Dionne; Martin Lebeau
  8. Age, SES, and Health: A Population Level Analysis of Health Inequalities over the Life Course By Steven Prus
  9. Retirement, health, unemployment, the business cycle and automatic stabilization in the OECD By Julia Darby; Jacques Mélitz
  10. Is the US Population Behaving Healthier? By David M. Cutler; Edward L. Glaeser; Allison B. Rosen
  11. Generic entry into a regulated pharmaceutical market By Iván Moreno Torres; Jaume Puig; Joan-Ramon Borrell-Arqué
  12. Informal care and labour force participation among middle-aged women in Spain By David Casado; Pilar García Gómez; Ángel López
  13. The problem of prevention By Benoit, Jean-Pierre; Dubra, Juan
  14. The Absolute Health Income Hypothesis Revisited: A Semiparametric Quantile Regression Approach By Stengos, T.; Sun, Y.
  16. Stagnation in the Drug Development Process: Are Patents the Problem? By Dean Baker
  17. Waste in the Medicare Drug Benefit: Why the Doughnut Hole is Unnecessary By Dean Baker
  18. Copayments in the German Health System – Do They Work? By Boris Augurzky; Thomas Bauer; Sandra Schaffner
  19. Gender Differences in Smoking Behavior By Mathias Sinning; Silja Göhlmann; Thomas Bauer
  20. Tobacco and Alcohol: Complements or Substitutes? - A Statistical Guinea Pig Approach By Harald Tauchmann; Silja Göhlmann; Till Requate; Chistoph M. Schmidt
  21. Who gets the Credit? Determinants of the Probability of Default in the German Hospital Sector By Boris Augurzky; Dirk Engel; Christoph Schwierz
  22. Cost and Technical Efficiency of German Hospitals – A Stochastic Frontier Analysis By Annika Frohloff
  23. The relative impact of income and health on the subjective well-being across generations in Europe By Eric Bonsang
  24. QALYs versus HYEs - What's Right and What's Wrong By Ried, Walter
  25. Health Insurance and Consumer Welfare: The Case of Monopolistic Drug Markets By Anlauf, Markus; Wigger, Berthold U.
  26. True health vs. response styles: Exploring cross-country differences in self-reported health By Hendrik Jürges
  27. Cross-National Variations in the Correlation between Frequency of Prayer and Health among Older Europeans By Karsten Hank; Barbara Schaan
  28. The Effect of Pensions on Longevity: Evidence from Union Army Veterans By Martin Salm

  1. By: Joan Costa Font (Universitat de Barcelona)
    Abstract: Rational learning theories postulate that information channels and cognitive biases such as individual optimism may influence an individuals assessment of the risk of undesired events, especially with regard to those that have a cumulative nature. This is the case with disability in old age, which may take place upon survival to an advanced age, and such factors have been regarded as responsible for certain individual behaviours (for example, the limited incidence of insurance purchase). This paper examines the determinants of individual perceptions with regard to disability in old age and longevity. The cumulative nature of such perceptions of risk is tested, and potential biases are identified, including optimism and a set of information determinants. Empirical evidence from a representative survey of Catalonia is presented to illustrate these effects. The findings from this research suggest a significant overestimation of disability in old age, yet this is not the case with longevity. Furthermore, individual perceptions with regard to disability in old age, unlike those with regard to longevity, exhibit on aggregate an optimistic bias and, are perceived as cumulative risks. Gender influences the perceived risk of disability in old age at a population level but not at the individual level, and the opposite holds true for age. Finally, self-reported health status is the main variable behind risk perceptions at both the individual and population level.
    Keywords: longevity, disability in old age, risk perceptions, optimism, cumulative risks
    JEL: I11 D81 I12
    Date: 2007
  2. By: Ed Westerhout; Kees Folmer
    Abstract: It is well-known that co-payments in health insurance may increase social welfare by reducing moral hazard. Considerably less is known about the form co-payment schemes should ideally take. This paper investigates what co-payment rate and co-payment maximum characterize the optimal scheme, i.e. the scheme that achieves the highest level of social welfare, within the class of two-part co-payment schemes of which the second part features a zero rate. It also quantifies the welfare losses that correspond with sub-optimal co-payment schemes. The paper uses a model with optimizing households that are risk-averse, exercise priceelastic demand and are aware of the kinks in their budget constraints. Numerical simulations with this model indicate that the optimal scheme combines a 80% rate with a maximum of about 600 euro. Sensitivity analysis shows that the maximum varies a lot with changes in basic parameters; the 80% value for the optimal co-payment rate is quite robust, though. The welfare losses that correspond to alternative co-payment schemes are generally quite small.
    Keywords: Moral Hazard; Deductibles; Co-payments
    JEL: D60 H21 I18
    Date: 2007–02
  3. By: Pattikawa, L.H. (Erasmus Research Institute of Management (ERIM), RSM Erasmus University)
    Abstract: Nowadays, the U.S. pharmaceutical industry has been under thorough scrutiny. Popular press claims of intensive marketing activities that go beyond R&D, the strong increase of me-too drugs, and, at the same time, the high industry profitability have contributed to public skepticism. Despite this increasing role of marketing, studies on the profitability of pharmaceutical firms mainly focus on the role of R&D. In this paper, we investigate the impact of advertising and product differentiation on pharmaceutical firms? market value over the period 1971-2005. Especially, we examine whether there has been a change in the pattern of returns in these variables over this period. Our results show that, nowadays, pharmaceutical firms? performance is not only closely linked to their R&D activities but also to marketing activities such as advertising and product differentiation. Since the 1990s, the return of advertising has become three times larger than that of R&D. In addition, we found that the impact of product differentiation came largely from the introduction of the so called incrementally modified drugs (IMD). The vast increase of the number of IMDs since the 1990s is likely to contribute to this development. Our results emphasize the role of advertising and product differentiation in the virtuous rent-seeking behavior in the pharmaceutical industry.
    Keywords: Advertising;Product differentiation;Marketing;Market value;Panel data;Pharmaceutical industry;
    Date: 2007–03–28
  4. By: Timothy J. Halliday (Department of Economics, University of Hawaii at Manoa; John A. Burns School of Medicine)
    Abstract: We investigate the impact of exogenous income shocks on health using twenty years of data from the Panel Study of Income Dynamics. To unravel the impact of income on health from unobserved heterogeneity and reverse causality, we employ techniques from the literature on the estimation of dynamic panel data models. Contrary to much of the previous literature on the gradient, we find that, on average, adverse income shocks lead to a deterioration of health. These effects are most pronounced for working-aged men and are dominated by transitions into the very bottom of the earnings distribution. We also provide suggestive evidence of an association between negative income shocks and higher mortality for working-aged men.
    Keywords: Gradient, Health, Dynamic Panel Data Models, Recessions
    JEL: I0 I12 J1
    Date: 2007–03–30
  5. By: Rudholm, Niklas (The Swedish Retail Institute)
    Abstract: The aim of this paper is to analyze the impact of the deregulation of the Norwegian pharmaceuticals market in 2001 on costs and availability of pharmaceutical products. Data has been collected from the annual reports of a sample of Norwegian pharmacies before and after the deregulation of the market. In addition, data regarding the number of pharmacies in each region in Norway has also been collected. In order to study costs, a translog function is estimated. Regressin models for the number of pharmacies in each region in Norway are also estimated. The results show that the costs of the individual pharmacies have not decreased as a consequence of the deregulation of the Norwegian pharmaceuticals market. The deregulation of the market did, however, increase the availability to pharmacy services substantially. The number of pharmacies increased from 392 in year 2000 to 524 in June 2004.
    Keywords: Deregulation; pharmaceuticals; translog cost function
    JEL: I11 I18 L11
    Date: 2007–04–04
  6. By: Ramani K.V.; Mavalankar Dileep; Govil Dipti
    Abstract: Blood is a vital healthcare resource routinely used in a broad range of hospital procedures. It is also a potential vector for harmful, and sometimes fatal, infectious diseases such as HIV, HBV, and HCV. Morbidity and mortality resulting from the transfusion of infected blood have far-reaching consequences. The economic cost of a failure to control the transmission of infection is visible in countries with a high prevalence of HIV. Shortfalls in blood supply have a particular impact on women with pregnancy complications, trauma victims and children with severe life-threatening anaemia. Ensuring a safe, source and ethical supply of blood and blood products and rational clinical use of blood are important public health responsibilities of every national government. Blood transfusion services in India rely on very fragmented mix of competing independent and hospital based blood banks of different levels of sophistication, serving different types of hospitals and patients. Voluntary and non-remunerated blood is in short supply. The SACS ensure only the availability of safe blood in blood banks. Clinical use of blood is not monitored, and the use of blood components is very low. Managing blood transfusion services involves donor management, blood collection, testing, processing, storing, issue of safe blood and blood products when clinically needed, and staff training. Maharashtra Government, by setting up its State Blood Transfusion Council as an independent unit under the Department of Health, has set up an excellent example to address the above managerial issues in meeting the transfusion requirements than any fragmented system. We strongly recommend the Maharashtra model to all other states and union territories in India.
    Keywords: Management, Blood, Blood components, Transfusion
    Date: 2007–03–31
  7. By: François Bellavance; Georges Dionne; Martin Lebeau
    Abstract: The value of a statistical life (VSL) is a very controversial topic, but one which is essential to the optimization of governmental decisions. Indeed, our society faces any number of risks (health, transportation, work, etc.) and, as resources are limited, their complete elimination is impossible. The role of governments is to act as effectively as possible in reducing these risks. To do so, one must first determine the value that society is willing to pay in order to save a human life. However, we see a great variability in the values obtained from different studies. The source of this variability needs to be understood, in order to offer public decision-makers better guidance in choosing a value and to set clearer guidelines for future research on the topic. This article presents a meta-analysis based on 40 observations obtained from 37 studies (from nine different countries) which all use a hedonic wage method to calculate the VSL. Our meta-analysis is innovative in that it is the first to use the mixed effects regression model (Raudenbush, 1994) to analyze studies on the value of a statistical life. The outcome of our meta-analysis allows us to conclude that the variability found in the results studied stems in large part from differences in methodologies.
    Keywords: Value of a statistical life, meta-analysis, mixed effects regression model, hedonic wage method, risk
    JEL: D80 D13 D61 H43 H51 H53 I18 J38 J58
    Date: 2006
  8. By: Steven Prus
    Abstract: This paper tests two competing hypotheses on the relationship between age, SES, and health inequality at the cohort/population level. The accumulation hypothesis predicts that levels of SES- based health inequality and consequently overall health inequality within a cohort progressively increase as it ages. The divergence-convergence hypothesis predicts that these inequalities increase only up to early-old age then decrease. Data from a Canadian national health survey are used in this study, and are adjusted for SES-biases in mortality. Bootstrap methods are employed to assess the statistical precision and significance of the results. The Gini coefficient is used to estimate change in the overall level of health inequality with age and the Concentration coefficient estimates the contribution of SES- based health inequalities to this change. Health is measured using the Health Utilities Index and income and education provide the measure of SES. First, the findings show that the Gini coefficient progressively increases from 0.048 (95% CI: 0.045, 0.051) at ages 15-29 to 0.147 (95% CI: 0.131, 0.163) at ages 80+. Second, the data reveal that health inequalities between SES groups (Concentration coefficients for income and education) tend to follow a similar pattern of divergence. Together these findings provide support for the accumulation hypothesis. A notable implication of the study's findings is that the level of health inequality increases when compensating for age-specific socio- economic differences in mortality. These selective effects of mortality should be considered in future research on health inequalities and the life course.
    Keywords: Health Inequality, Life Course, SES, Gini/Concentration coefficient
    JEL: C10 I10
    Date: 2007–04
  9. By: Julia Darby (University of Strathclyde); Jacques Mélitz (University of Strathclyde, CREST-INSEE, and CEPR)
    Abstract: Official adjustments of the budget balance to the cycle assume that the only category of gov-ernment spending that responds automatically to the cycle is unemployment compensation. But estimates show otherwise. Payments for pensions, sickness, subsistence, invalidity, childcare and subsidies of all sorts to firms respond automatically and significantly to the cycle as well. In addition, it is fairly common to use official figures for cyclically adjusted budget balances, di-vide by potential output, and use the resulting ratios to study discretionary fiscal policy. But if potential output is not deterministic but subject to supply shocks, then apart from anything else, those ratios are inefficient estimates of the cyclically-independent ratios of budget balances di-vided by potential output. (A fortiori, they are inefficient estimates of the cyclically adjusted ratios of budget balances to observed output.) Accordingly, the paper makes use of detailed data from the OECD’s Social Expenditure database to produce separate estimates of the impact of the cycle on disaggregated components of the budget balance, both in levels and in the form of their ratios to output. In addition, we discuss the relation between the two sorts of estimates. When the focus is on ratios of expenditure and revenue to output, the cyclical adjustments de-pend more on inertia in government spending on goods and services than they do on taxes (which are largely proportional to output). But they depend even still more on transfer pay-ments. Besides calling for different series for discretionary fiscal policy if ratios serve, these results also raise questions about the general policy advice to “let the automatic stabilizers work.â€
    Keywords: automatic stabilization, discretionary fiscal policy, cyclically adjusted budget balances
    JEL: E0 E6
    Date: 2007–02–02
  10. By: David M. Cutler; Edward L. Glaeser; Allison B. Rosen
    Abstract: In the past few decades, some measures of population risk have improved, while others have deteriorated. Understanding the health of the population requires integrating these different trends. We compare the risk factor profile of the population in the early 1970s with that of the population in the early 2000s and consider the impact of a continuation of recent trends. Despite substantial increases in obesity in the past three decades, the overall population risk profile is healthier now than it was formerly. For the population aged 25-74, the 10 year probability of death fell from 9.8 percent in 1971-75 to 8.4 percent in 1999-2002. Among the population aged 55-74, the 10 year risk of death fell from 25.7 percent to 21.7 percent. The largest contributors to these changes were the reduction in smoking and better control of blood pressure. Increased obesity increased risk, but not by as large a quantitative amount. In the future, however, increased obesity may play a larger role than continued reductions in smoking. We estimate that a continuation of trends over the past three decades to the next three decades might offset about a third of the behavioral improvements witnessed in recent years.
    JEL: I12 J11
    Date: 2007–04
  11. By: Iván Moreno Torres; Jaume Puig; Joan-Ramon Borrell-Arqué
    Abstract: The aim of this paper is to analyse empirically entry decisions by generic firms into markets with tough regulation. Generic drugs might be a key driver of competition and cost containment in pharmaceutical markets. The dynamics of reforms of patents and pricing across drug markets in Spain are useful to identify the impact of regulations on generic entry. Estimates from a count data model using a panel of 86 active ingredients during the 1999–2005 period show that the drivers of generic entry in markets with price regulations are similar to less regulated markets: generic firms entries are positively affected by the market size and time trend, and negatively affected by the number of incumbent laboratories and the number of substitutes active ingredients. We also find that contrary to what policy makers expected, the system of reference pricing restrains considerably the generic entry. Short run brand name drug price reductions are obtained by governments at the cost of long run benefits from fostering generic entry and post-patent competition into the markets.
    Keywords: Entry; Generic Drugs; Pharmaceutical industry; Reference pricing
    JEL: I11 L11 L65
    Date: 2007–02
  12. By: David Casado; Pilar García Gómez; Ángel López
    Abstract: Informal care is today the form of support most commonly used by those who need other people in order to carry out certain activities that are considered basic (eating, dressing, taking a shower, etc.), in Spain and in most other countries in the region. The possible labour opportunity costs incurred by these informal carers, the vast majority of whom are middle-aged women, have not as yet been properly quantified in Spain. It is, however, crucially important to know these quantities at a time when public authorities appear to be determined to extend the coverage offered up to now as regards long-term care. In this context, we use the Spanish subsample of the European Community Household Panel (1994- 2001) to estimate a dynamic ordered probit and so attempt to examine the effects of various types of informal care on labour behaviour. The results obtained indicate the existence of labour opportunity costs for those women who live with the dependent person they care for, but not for those who care for someone outside the household. Furthermore, whereas caregiving for more than a year has negative effects on labour force participation, the same cannot be said of those who “start caregiving” and “stop caregiving”.
    Keywords: informal care, female labour force participation, panel data models, ECHP, attrition bias
    JEL: J14 J2 I10
    Date: 2007–03
  13. By: Benoit, Jean-Pierre; Dubra, Juan
    Abstract: Many disasters are foreshadowed by insufficient preventative care. In this paper, we argue that there is a true problem of prevention, in that insufficient care is often the result of rational calculations on the part of agents. We identify three factors that lead to dubious efforts in care. First, when objective risks of a disaster are poorly understood, positive experiences may lead to an underestimation of these risks and a corresponding underinvestment in prevention. Second, redundancies designed for safety may lead agents to take substandard care. Finally, elected officials have an incentive to underinvest in prevention for some disasters, especially those that are relatively unlikely.
    Keywords: Prevention; Accidents; Volunteer's Dilemma; Learning; Career Concerns.
    JEL: D83 D81 D82
    Date: 2006–03–29
  14. By: Stengos, T.; Sun, Y.
    Date: 2006
  15. By: Richard S.J. Tol (Economic and Social Research Institute, Dublin); Kristie L. Ebi; Gary W. Yohe
    Abstract: We study the effects of development and climate change on infectious disease in Sub-Saharan Africa. Infant mortality and infectious disease are close related, but there are better data for the former. In an international cross-section, per capita income, literacy, and absolute poverty significantly affect infant mortality. We use scenarios of these three determinants, and of climate change to project the future incidence of malaria, assuming it to change proportionally to infant mortality. Malaria deaths will first increase, because of population growth and climate change, but then fall, because of development. This pattern is robust to the choice of scenario, parameters, and starting conditions; and it holds for diarrhoea, schistosomiasis, and dengue fever as well. However, the time and level of the mortality peak is very sensitive to assumptions. Climate change is important in the medium term, but dominated in the long term by development. As climate can only be changed with a substantial delay, development is the preferred strategy to reduced infectious diseases, even if that is exacerbated by climate change.
    Keywords: Development, infectious disease, climate change, Sub-Saharan Africa, malaria
    JEL: I12 O13 Q54
    Date: 2006–06
  16. By: Dean Baker
    Abstract: The rate of new drug development has stagnated, in spite of large increases in both private and public sector spending on biomedical research. The flip side of slower progress is higher drug costs. The cost of developing new drugs has been rising at an average real rate of more than 7 percent since 1987. This report considers the ways in which government patent monopolies distort incentives so that pharmaceutical companies may not opt to minimize research costs. It documents some of the perverse incentives created by patent monopolies in drugs.
    JEL: O31 O32 O34 O38 L12 I18 H21 D42
    Date: 2007–03
  17. By: Dean Baker
    Abstract: This paper shows that the excess costs of the drug benefit plan are considerably larger than the size of the doughnut hole.
    Date: 2006–07
  18. By: Boris Augurzky; Thomas Bauer; Sandra Schaffner
    Abstract: This paper examines the effect of copayments on doctor visits using the German health care reform of 2004 as a natural experiment. In January 2004, copayments of 10 euros for the first doctor visit in each quarter have been introduced for all adults in the statutory health insurance. Individuals covered by private health insurance as well as youths have been exempted from these copayments. We use them as control groups in a difference-in-differences approach to identify the causal impact of these copayments on doctor visits. In contrast to expectations and public opinion our results indicate that there are no statistically significant effects of the copayments on the decision of visiting a doctor.
    Keywords: Copayment, doctor visits, difference-in-differences, fixed-effect logit
    JEL: I11 I18
    Date: 2006–08
  19. By: Mathias Sinning; Silja Göhlmann; Thomas Bauer
    Abstract: This paper investigates gender differences in smoking behavior using data from the German Socio-economic Panel (SOEP). We develop a Blinder- Oaxaca decomposition method for count data models which allows to isolate the part of the gender differential in the number of cigarettes daily smoked that can be explained by differences in observable characteristics from the part attributable to differences in coefficients. Our results reveal that the major part of the gender smoking differential is attributable to differences in coefficients indicating substantial differences in the smoking behavior between men and women rather than differences in characteristics.
    Keywords: Blinder-Oaxaca decomposition, count data models, SOEP, smoking, gender differences
    JEL: C25 I12
    Date: 2006–08
  20. By: Harald Tauchmann; Silja Göhlmann; Till Requate; Chistoph M. Schmidt
    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, instrumental variables approach
    JEL: C31 D12 I12
    Date: 2006–11
  21. By: Boris Augurzky; Dirk Engel; Christoph Schwierz
    Abstract: Huge underinvestment increases the need for private borrowing in the German hospital sector, the access to which is partly determined by the probability of default (PD) of individual hospitals. Using ordinary least squares and quantile regression techniques this paper provides first empirical evidence of its kind to evaluate the PD in the hospital sector and its constituent determinants. Based on annual account and medical data from 17% of all German hospitals we find that the current average probability of default amounts to approximately 1.7%, which is slightly higher than the average probability for all German firms. Among other determinants, we find that public ownership significantly increases the risk of default, while private for-profit and private not-for-profit hospitals do not differ. Moreover, demographic change in the form of population growth is confirmed to be relevant for the PD.
    Keywords: Hospital profitability, quantile regression, probability of default, ownership type theories
    JEL: I11 L31
    Date: 2006–11
  22. By: Annika Frohloff
    Abstract: Using a newly available and multifaceted dataset provided by the German Federal Statistical Office, this paper is the first to investigate both technical and cost efficiency of more than 1500 German general hospitals conducting a stochastic frontier analysis. The empirical results for the years from 2000 to 2003 indicate that private and non-profit hospitals are on average less cost and technical efficient than publicly owned hospitals. One explanation for this result may be that German private and non-profit hospitals produce at a longer average length of stay and, thereby, a higher cost per case than public institutions due to the incentives provided by reimbursement schemes until 2004. Furthermore, the paper reveals that non-subsidised hospitals are less efficient than their respective counterparts. Controlling for patients’ characteristics (in addition to the constructed case-mix weights), it can be shown that a high ratio of old patients decreases efficiency whereas a high ratio of female patients and a high surgery rate increase it.
    Keywords: Hospital efficiency, ownership, privatisation
    JEL: C13 I11 L33
    Date: 2007–03
  23. By: Eric Bonsang
    Abstract: The relative importance of the components contributing to individual wellbeing are likely to change over the life-cycle. Any social policy, whose the main role is to promote the well-being of the population as a whole, neglecting this aspect will redistribute inefficiently the resources across age categories. This paper analyses the life-cycle preferences over income and health. We estimate the relative effects of health and income shocks on individual well-being across age categories by using subjective measure of well-being from the European Community Household Panel (ECHP) from 1994 to 2001. The analysis uses self-reported satisfaction with different domains of life (main activity, income, health, free time and housing) to construct a measure of individual well-being. The analysis concludes that the effect of household income on the well-being of the elderly is lower than it is for the young. Moreover, illness is associated to a higher drop in the wellbeing of the elderly than it is for the young. The larger impact of illness on the well-being of the elderly is due to the fact that health disease has more impacts on the other domains of life (i.e. satisfaction with main activity and satisfaction with free time) than for the young suggesting that illness is more depressing among the elderly because it decreases their functioning in the different domains of life preventing them to enjoy their daily activities.
    Date: 2006
  24. By: Ried, Walter (Institut für Volkswirtschaft und Statistik (IVS))
    Abstract: Some twenty years ago, the quality-adjusted life years (QALY) approach was developed for the purpose of assessing changes in mortality and morbidity in terms of individual preferences. Recently, it has been challenged by the healthy-years equivalent (HYE)
  25. By: Anlauf, Markus; Wigger, Berthold U. (Institut für Volkswirtschaft und Statistik (IVS))
    Abstract: Individual moral hazard engendered by health insurance and monopolistic production are both typical phenomena of drug markets. We develop a simple model containing these two elements and show that private agents tend to overinsure themselves against health respectively drug expenses if drugs can be produced at low marginal costs. If marginal costs are negligible, health insurance should be abandoned at all.
    JEL: I11 D42 H51
  26. By: Hendrik Jürges (Mannheim Research Institute for the Economics of Aging (MEA))
    Abstract: The aim of this paper is to decompose cross-national differences in self-reported general health into parts explained by differences in "true" health, measured by diagnosed conditions and measurements, and parts explained by cross-cultural differences in response styles. The data used were drawn from the Survey of Health, Ageing and Retirement in Europe 2004 (SHARE), using information from 22,731 individuals aged 50 and over from 10 European countries. Self-rated general health shows large cross-country variations. According to their self-reports, the healthiest respondents live in the Scandinavian countries and the least healthy live in Southern Europe. Counterfactual self-reported health distributions that assume identical response styles in each country show much less variation in self-reports than factual self-reports. Danish and Swedish respondents tend to largely over-rate their health (relative to the average) whereas Germans tend to under-rate their health. If differences in reporting styles are taken into account, cross-country variations in general health are reduced but not eliminated. Failing to account for differences in reporting styles may yield misleading results.
    JEL: C42 I12
    Date: 2006–05–23
  27. By: Karsten Hank; Barbara Schaan (Mannheim Research Institute for the Economics of Aging (MEA))
    Abstract: This research investigates the relationship between private religious involvement, measured by the individual’s frequency of prayer, and various dimensions of older adults’ physical and mental health in nine European countries. Using data from the 2004 ‘Survey of Health, Ageing and Retirement in Europe’ (SHARE), we estimate pooled and regional multivariate logistic regression models for four dependent variables: self-perceived general health, general physical health, functional limitations, and mental health. Our results suggest that private religious involvement among the population aged 50 or older is negatively correlated with all four health outcomes in the analysis. Moreover, we detect only minor cross-national variations in the prayer-health nexus within continental Europe. Although the cross-sectional nature of our data prohibits any statements about possible causal relationships underlying the observed correlations, the evidence presented here suggests that religion should be considered as a potentially relevant factor in future studies of older European’s health.
    Date: 2007–02–09
  28. By: Martin Salm (Mannheim Research Institute for the Economics of Aging (MEA))
    Abstract: This study uses changes in pension laws for Union Army veterans as a natural experiment to estimate the causal effect of pensions on longevity, and to examine potential pathways underlying such a relationship. We examine the effects of the pension laws of 1907 and 1912, which granted old-age pensions to Union Army veterans. Life expectancy for veterans, who received such a pension, increased by 0.5 years and 2.7 years, respectively. The effect of veteran pensions on longevity was large across wealth groups and size of city. Pensions reduced mortality for both acute and non-acute causes of death.
    Keywords: Health gradient, pensions, mortality, Union Army veterans
    JEL: I12 J14 N41
    Date: 2007–03–12

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