nep-hea New Economics Papers
on Health Economics
Issue of 2007‒05‒19
thirteen papers chosen by
Yong Yin
SUNY at Buffalo, USA

  1. Assessing Economic Damages in Personal Injury and Wrongful Death Litigation: The State of North Carolina By George A. Schieren; Gary R. Albrecht
  2. Economic Efficiency and Damage Awards in Personal Injury Torts By George A. Schieren
  3. Relative status and well-being: evidence from U.S. suicide deaths By Mary C. Daly; Daniel J. Wilson; Norman J. Johnson
  4. Parental Income, Lifetime Income and Mortality By Palme, Mårten; Sandgren, Sofia
  5. Health and the Evolution of Welfare across Brazilian Municipalities By Rodrigo R. Soares
  6. Ethnic Inequality in Canada: Economic and Health Dimensions By Ellen M. Gee; Karen M. Kobayashi; Steven Prus
  7. Tests of Utility Independence When Health Varies over Time By Anne Spencer; Angela Robinson
  8. Are Some Deaths Worse Than Others? Results from a Discrete Choice Experiment By Angela Robinson; Judith Covey; Anne Spencer; Graham Loomes
  9. Multimarket Contact in Pharmaceutical Markets By Javier Coronado; Sergi Jiménez-Martín; Pedro L. Marín
  10. Welfare Analysis of HIV/AIDS: Formulating and Computing a Continuous Time Overlapping Generations Policy Model By Shorish, Jamsheed
  11. Hospital Financing and the Development and Adoption of New Technologies By Marisa Miraldo
  12. Reference Pricing Versus Co-Payment in the Pharmaceutical Industry: Firm's Pricing Strategies By Marisa Miraldo
  13. Older Workers' Access to Employer-Sponsored Retiree Health Insurance, 2000-2004 By Christine Eibner; Alice Zawacki; Elaine Zimmerman

  1. By: George A. Schieren; Gary R. Albrecht
    Abstract: This article is one in a series of articles in the Journal of Forensic Economics detailing the different and the common methods for assessing economic damages in the various states. In this article we discuss the legal framework by which economic damages are computed in personal injury and wrongful death cases in the state courts of North Carolina. The relevant state statutes, case precedents, and North Carolina Pattern Instructions (jury) are presented for the various aspects of a forensic economist’s work in estimating economic damages.
    Date: 2007
  2. By: George A. Schieren
    Abstract: Past discussions about economic efficiency and personal injury torts have focused on the relationship between the optimal amount of care a potential injurer should take for economic efficiency. Typically this discussion has assumed that the economic damages are strictly monetary without any full consideration of how these damages should be measured. This paper constructs a general model which incorporates as an unknown the amount of monetary damages that an injurer should pay in the interest of economic efficiency. The optimal amount of damages need to be known to serve as signal for the amount of care a potential injurer should take. The model shows that the optimal damage award should be at that point where that marginal utility of money paid out by the injurer equals the marginal utility of the money received by the victim under his utility function after the accident and not considering any non-monetary damages.
    Date: 2007
  3. By: Mary C. Daly; Daniel J. Wilson; Norman J. Johnson
    Abstract: This paper empirically assesses the theory of interpersonal income comparison using individual level data on suicide deaths in the United States. We model suicide as a choice variable, conditional on exogenous risk factors, reflecting an individual's assessment of current and expected future utility. Our empirical analysis considers whether suicide risk is systematically related to the income of others, holding own income and other individual factors fixed. We estimate proportional hazards and probit models of the suicide hazard using two separate and independent data sets: (1) the National Longitudinal Mortality Study and (2) the Detailed Mortality Files combined with the 5 percent Public Use Micro Sample of the 1990 decennial census. Results from both data sources show that, controlling for own income and individual characteristics, individual suicide risk rises with reference group income. This result holds for reference groups defined broadly, such as by county, and more narrowly by county and one demographic marker (e.g., age, sex, race). These findings are robust to alternative specifications and cannot be explained by geographic variation in cost of living, access to emergency medical care, mismeasurement of deaths by suicide, or by bias due to endogeneity of own income. Our results confirm findings using self-reported happiness data and are consistent with models of utility featuring "external habit" or "Keeping Up with the Joneses" preferences.
    Keywords: Income distribution
    Date: 2007
  4. By: Palme, Mårten (Dept. of Economics, Stockholm University); Sandgren, Sofia (Department of Economics, Norwegian University of Science and Technology)
    Abstract: This paper studies the relation between parental economic resources and mortality later in life. We use a data set on a cohort of individuals born in 1928 in the county of Malmö in southern Sweden, which contains exceptionally detailed measures of parental household income from five years during the indivduals' childhood between 1929 and 1942. The data also contain very rich information on individual earnings throughout these individuals' entire life cycle that allows us to construct a measure of lifetime earnings. Date and cause of death are obtained from national registers. Using Cox proportional hazard models, we find an inverse relationship between parental indome and mortality, also when controling for indivdual lifetime income and when studying those with high education separately. A competing risk analysis shows the relation between parental income and mortality to apply to cancer as the cause of death.
    Keywords: Health; Life Expectancy; Longevity; Cause of Death; Cox Proportional Hazard Models
    JEL: D31 I10 I12 J10
    Date: 2007–05–10
  5. By: Rodrigo R. Soares (University of Maryland, Catholic University of Rio de Janeiro, NBER and IZA)
    Abstract: This paper describes the pattern of reductions in mortality across Brazilian municipalities between 1970 and 2000, and analyzes its causes and consequences. It shows that, as in the international context, the relationship between income and life expectancy has shifted consistently in the recent past. But reductions in mortality within Brazil have been more homogeneously distributed than across countries. We use a compensating differentials approach to estimate the value of the observed reductions in mortality. The results suggest that gains in life expectancy had a welfare value equivalent to 39% of the growth in income per capita, being therefore responsible for 28% of the overall improvement in welfare. We then use a dynamic panel to conduct a preliminary assessment of the potential determinants of these gains. We show that improvements in education, access to water, and sanitation seem to be important determinants of the dimension of changes in life expectancy not correlated with income.
    Keywords: mortality, life expectancy, value of life, inequality, health
    JEL: I12 I31 I38 J17 O15 O54
    Date: 2007–05
  6. By: Ellen M. Gee; Karen M. Kobayashi; Steven Prus
    Abstract: This study examines ethnic based differences in economic and health status. We combine existing literature with our analysis of data from the Canadian Census and National Population Health Survey. If a given sub-topic is well researched, we summarize the findings; if, on the other hand, less is known, we present data placing them in the context of whatever literature does exist. Our findings are consistent with existing literature on ethnic inequalities in Canada. Recent immigrants with a mother tongue other than English or French are among the most economically disadvantaged in Canadian society, though the results vary depending on gender and ethnic background. In fact economic inequality according to type of occupation can be attributed to gender rather than ethnicity; that is, the Canadian labour force continues to be more gender- than ethnically-differentiated. Yet recent immigrants, especially from Asia, are advantaged in health outcomes compared to Canadian-born persons – the “healthy immigrant” effect. Interestingly they are less likely to report having a physical check-up and, for women (especially Asian-born women), a mammogram within the last year compared to their Canadian-born counterparts. Given the significance of both gender and ethnicity as predictors of well-being, future research should examine the intersection between the two identity markers and their relationship to social inequality.
    Keywords: ethnicity, immigration, language, gender, income, occupation, health
    JEL: I18 J15
    Date: 2007–05
  7. By: Anne Spencer (Queen Mary, University of London); Angela Robinson (University of East Anglia)
    Abstract: In the conventional QALY model, people’s preferences are assumed to satisfy utility independence. When health varies over time, utility independence implies that the value attached to a health state is independent of the health state that arise before or after it. In this paper we set out to test the extent to which utility independence is undermined by sequence and duration effects. Two separate studies were conducted involving a total of 155 respondents. In study one, we conducted 5 tests of utility independence using a standard gamble question. Three of the tests of utility independence were repeated in study two after randomisation was introduced in order to take account of possible ordering effects. Utility independence holds in the majority of cases examined here and so our work generally supports the use of utility independence to derive more tractable models.
    Keywords: Utility independence, QALY
    JEL: H5 I10
    Date: 2007–05
  8. By: Angela Robinson (University of East Anglia); Judith Covey (University of Durham); Anne Spencer (Queen Mary, University of London); Graham Loomes (University of East Anglia)
    Abstract: Previous research has shown that people wish a premium to be placed on the prevention of certain types of deaths as they perceive those deaths as ‘worse’ than others. The research reported in this paper is an attempt to quantify such a ‘bad death’ premium via a discrete choice experiment (DCE). The four underlying attributes included were: the age of the victim, who was most to blame for the death, the severity of the victim’s pain and suffering in the period leading up to death, and the duration of the victim’s pain and suffering in the period leading up to death. In addition, a fifth attribute - number of deaths- was included in order to provide a <i>quantitative</i> scale against which to measure the “bad death premium”. The results show that each of the 4 underlying attributes did matter to respondents in determining whether deaths were worse than others, but also uncovered marked insensitivity to variations in the number of those deaths. The implication of our findings for the use of quantitative variables in DCEs is discussed.
    Keywords: Discrete choice experiment, Value of preventing a fatality, Relative weights, Insensitivity
    JEL: H5 I10
    Date: 2007–05
  9. By: Javier Coronado; Sergi Jiménez-Martín; Pedro L. Marín
    Abstract: The purpose of this paper is to analyze the effect of multimarket contact on the behavior of pharmaceutical firms controlling for different levels of regulatory constraints using IMS MIDAS database. Theoretically, firms that meet in several markets are expected to be capable of sustaining implicitly more profitable outcomes, even if perfect monitoring is not possible. Firms may find it profitable to redistribute their market power among markets where they are operating. We present evidence for nine OECD countries with different degrees of regulation and show that regulation affects the importance of economic forces on firms' price setting behavior. Furthermore, our results confirms the presence of the predictions of the multimarket theory for more market friendly countries (U.S. and Canada) and less regulated ones (U.K., Germany, Netherlands), in contrast, for highly regulated countries (Japan, France, Italy and Spain) the results are less clear with some countries being consistent with the theory while others contradicting it.
    Keywords: Pharmaceutical prices, Multimarket Contact, Regulation
    JEL: L11 L13 L65 I18
    Date: 2007–02
  10. By: Shorish, Jamsheed (Department of Economics and Finance, Institute for Advanced Studies, Vienna, Austria and Department of Economics, University of Illinois at Urbana-Champaign)
    Abstract: We introduce a continuous time overlapping generations demographic model, in which a social planner seeks to generate an optimal policy for influencing the demographic change of the underlying population in a neoclassical growth model. The model has the notable feature that the underlying state space is a continuum, leading to a Hamilton-Jacobi-Bellman PDE system which is defined over a Hilbert space generated by the ages of the population cohorts. In this technical report the dynamic programming problem is presented and the numerical approximation using a finite difference approximation is derived. This analysis is part of a larger research program on welfare analysis and policy development for the HIV/AIDS global pandemic.
    Keywords: Optimal control, continuous time overlapping generations, Hamilton-Jacobi-Bellman PDE, finite difference approximation, HIV/AIDS, demographic modeling
    JEL: C61 C63 D61
    Date: 2007–05
  11. By: Marisa Miraldo (Centre for Health Economics, University of York)
    Abstract: We study the influence of different reimbursement systems, namely Prospective Payment System, Cost Based Reimbursement System and Mixed Reimbursement System on the development and adoption of different technologies with an endogenous supply of these technologies. We focus our analysis on technology development and adoption under two models: private R&D and R&D within the hospital. One of the major findings is that the optimal reimbursement system is a pure Prospective Payment System or a Mixed Reimbursement System depending on the market structure.
    Keywords: Prospective Payment System; Cost Based Reimbursement; R&D
    JEL: I11 O33
    Date: 2007–04
  12. By: Marisa Miraldo (Centre for Health Economics, University of York)
    Abstract: Within a horizontally differentiation model and allowing for heterogeneous qualities, we analyze the effects of reference pricing reimbursement on firms’ pricing strategies. With this analysis we find inherent incentives for firms’ pricing behaviour, and consequently we shed some light on time consistency of such policy. The analysis encompasses different reference price rules. Results show that if drugs have equal quality, reference pricing may lead to higher prices. With quality differentiation both the minimum and linear policies unambiguously lead to higher prices.
    Date: 2007–04
  13. By: Christine Eibner; Alice Zawacki; Elaine Zimmerman
    Abstract: Using a multivariate framework, we analyze recent trends in employer provision of retiree health insurance (RHI), eligibility for new retirees, and retiree contribution requirements. We also explore whether local labor market characteristics such as the unemployment rate influence RHI provision. Finally, we examine whether the Medicare Modernization Act (MMA) was associated with diverging trends in RHI access for Medicare-eligible and early retirees. Data come for the Medical Expenditure Panel Survey—Insurance Component (MEPS-IC). We find that, while RHI provision to existing retirees remained stable, eligibility for new retirees declined, and contribution requirements increased between 2000 and 2004. The local labor market had no effect on RHI provision. While early retiree coverage was more common than coverage for Medicare-eligible retirees, we did not find a divergence subsequent to MMA. These results suggest growing financial instability for retirees, both because RHI contribution requirements increased, and because businesses dropped coverage for new retirees.
    Keywords: retiree health insurance, employers, Medicare, aging
    Date: 2007–04

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