nep-hea New Economics Papers
on Health Economics
Issue of 2007‒09‒02
fourteen papers chosen by
Yong Yin
SUNY at Buffalo, USA

  1. Health insurance as a strategy for access: By Jairo Restrepo; Andrés Zambrano; Mauricio Velez; Manuel Ramirez
  2. HIV/AIDS Contamination Risk, Savings and the Welfare Effects of Diagnostic Testing By Lammers, J.; Meijdam, A.C.; Verbon, H.A.A.
  3. The HIV Anticaptory Saving Motive: An Empirical Analysis in South Africa By Kuilen, G. van de; Lammers, J.
  4. A Bioeconomic Foundation of the Malthusian Equilibrium: Body Size and Population Size in the Long-Run By Dalgaard, Carl-Johan; Strulik, Holger
  5. Health and Civil War in Rural Burundi By Tom Bundervoet; Philip Verwimp; Richard Akresh
  6. Wages and Ageing: Is There Evidence for the "Inverse-U" Profile? By Michal Myck
  7. Malaria: Disease Impacts and Long-Run Income Differences By Douglas Gollin; Christian Zimmermann
  8. The National Regulation of Pharmaceutical Markets and the Timing of New Drug Launches in Europe By Alexander Heuer; Malwina Mejer; Jennifer Neuhaus
  9. Trade in Health Services - An Analytical Framework Valuation Effects and Interest Rate Changes By Patricia Waeger
  10. Looking for Private Information in Self-Assessed Health By James Banks; Thomas Crossley; Simo Goshev
  11. Tax, Subsidy, and/or Information for Health: An Example from Fish Consumption By Stephan Marette; Jutta Roosen; Sandrine Blanchemanche
  12. Who Smokes and How Much? - Empirical Evidence for Germany By Silja Göhlmann
  13. The Determinants of Smoking Initiation - Empirical Evidence for Germany By Silja Göhlmann
  14. The influence of supplementary health insurance on switching behaviour : evidence on Swiss data By Brigitte Dormont; Pierre-Yves Geoffard; Karine Lamiraud

  1. By: Jairo Restrepo; Andrés Zambrano; Mauricio Velez; Manuel Ramirez
    Abstract: The Colombian reform to the health system (Law 100 of 1993) established, as strategy to facilitate the access, the universality of a health insurance that is acquired by means of the quotation in the contributive regime or by means of the gratuitous affiliation to the subsidized regime, in order to cover all the population with a unique plan of benefits that includes services in all levels of complexity. In this paper we intend to cover the main streamlined facts of the reform as far as coverage and access of the insurance, by means of logit models, the determinants of the enrollment and the access are considered, using data from the Living Standards Surveys of 1997 and 2003. It stands out that the coverage rose from 20% of the population in 1993 to 60% in 2003, although it seems very difficult to reach the universality; the structure and evolution of the coverage show that both regimes complement each other, while the contributive one has greater presence in the cities and among the population with formal employment, the subsidized one has greater weight among the rural population and in those with low levels of income; on the other hand, the insurance has advantages for the subsidized population, with a greater probability for use of the services, although the plan offers less benefits than the contributive one there are some barriers for the access.
    Date: 2007–03–01
  2. By: Lammers, J.; Meijdam, A.C.; Verbon, H.A.A. (Tilburg University, Center for Economic Research)
    Abstract: This paper models the effect of a HIV/AIDS epidemic on saving behavior and studies the welfare effects of testing for HIV. The model specifies a utility function that includes both regular consumption, and medical expenditures. Medical expenditures generate more utility if individuals are HIV infected, but they are only able to purchase the optimal medical consumption after being tested HIV positive. The paper describes different effects on aggregate savings according to different stages of the epidemic. We show that the HIV epidemic decreases savings if especially young individuals are (perceived to be) affected by the virus, but may increase savings if individuals perceive a sizable probability of getting infected later in life. By the same token, the welfare effects of testing young individuals differs greatly from the welfare effects of testing older individuals, the reason being that the savings responses to testing differ according to whether old or young individuals are tested.
    Keywords: saving behavior;perceived risk;HIV/AIDS;HIV testing;mortality;life-cycle model.
    JEL: D83 D91 I12 E21
    Date: 2007
  3. By: Kuilen, G. van de; Lammers, J. (Tilburg University, Center for Economic Research)
    Abstract: This paper studies the effect of the HIV/AIDS epidemic on saving behaviour. Two important characteristics of HIV result in opposing forces on savings: mortality increases, which reduces savings, and long-term illness risk increases, which enhances savings. We use a two period life-cycle model with uncertain lifetime including perceived HIV contamination risk to illustrate both the opposing effects of the HIV epidemic on individual savings and test the predictions of our model with data obtained from an economic experiment with real monetary incentives performed in South Africa. The empirical results show that increased mortality decreases the amount of savings and that having a high perception of HIV contamination risk increases savings. The latter effect confirms the HIV anticipatory saving hypothesis.
    Keywords: HIV/AIDS;saving behavior;illness risk;mortality;life-cycle model;time preferences.
    JEL: D12 D91 E21 I12
    Date: 2007
  4. By: Dalgaard, Carl-Johan; Strulik, Holger
    Abstract: This paper develops a bioeconomic Malthusian growth model. By integrating recent research on allometric scaling, energy consumption and ontogenetic growth, we provide a model where subsistence consumption is endogenously linked to body size and fertility. The theory admits a unique Malthusian equilibrium in a two-dimensional state space characterized by population density and body size (metabolic rate) of the representative adult. As a result, the analysis allows us to examine the link between human biology, economic productivity, body size, and population size. Off the steady-state we investigate the possibility of cyclical behavior of the size of a population and the size of its representative member over the very long-run. We also demonstrate that a take-off into sustained growth should be associated with increasing income, population size and body size. The increase in the latter is, however, bounded and can be viewed as convergence to a biologically determined upper limit.
    Keywords: Subsistence, Nutrition, Metabolism, Population Growth, Ontogenetic Growth, Malthus
    JEL: O11 I12 J13
    Date: 2007–08
  5. By: Tom Bundervoet (Free University of Brussels and HiCN); Philip Verwimp (ECARES, Free University of Brussels and HiCN); Richard Akresh (University of Illinois at Urbana Champaign and IZA)
    Abstract: We combine household survey data with event data on the timing and location of armed conflicts to examine the impact of Burundi’s civil war on children’s health status. The identification strategy exploits exogenous variation in the war’s timing across provinces and the exposure of children’s birth cohorts to the fighting. After controlling for province of residence, birth cohort, individual and household characteristics, and province-specific time trends, we find that children exposed to the war have on average 0.515 standard deviations lower height-for-age z-scores than non-exposed children. This negative effect is robust to specifications exploiting alternative sources of exogenous variation.
    Keywords: child health, economic shocks, stunting, Africa
    JEL: I12 J13 O12
    Date: 2007–07
  6. By: Michal Myck (DIW Berlin, IFS and IZA)
    Abstract: How individual wages change with time, and how they are expected to change as individuals grow older, is one of crucial determinants of their behaviour on the labour market including their decision to retire. The profile of individual hourly wages has for a long time been assumed to follow an "inverse-U" path, although there has been little work specifically concerning the age-wage profile and documenting it convincingly. The focus of this paper is the relationship between age and wages with special attention given to individuals close to retirement. The analysis is presented in a comparative context for Britain and Germany looking at two longitudinal datasets (BHPS and GSOEP respectively) for years 1995-2004. It stresses the importance of cohort effects and selection out of employment which seem crucial in determining the downward-sloping part of the "inverse-U" profile observed in most cross-sections. There seems to be little evidence that wages fall with age.
    Keywords: wage dynamics, ageing, selection
    JEL: J14 J21 J31 C14
    Date: 2007–08
  7. By: Douglas Gollin (Williams College); Christian Zimmermann (University of Connecticut and IZA)
    Abstract: The World Health Organization (WHO) reports that malaria, a parasitic disease transmitted by mosquitoes, causes over 300 million episodes of "acute illness" and more than one million deaths annually. Most of the deaths occur in poor countries of the tropics, and especially sub- Saharan Africa. Some researchers have suggested that ecological differences associated with malaria prevalence are perhaps the most important reason why some countries today are rich and others poor. This paper explores the question in an explicit dynamic general equilibrium framework, using a calibrated model that incorporates epidemiological features into a standard general equilibrium framework.
    Keywords: malaria, epidemiology, GDP, disease prevention, sub-Saharan Africa
    JEL: I1 O11 E13 E21
    Date: 2007–08
  8. By: Alexander Heuer; Malwina Mejer; Jennifer Neuhaus
    Abstract: We analyze the impact of national pharmaceutical regulation on the launch delay of new chemical entities approved by the EMEA’s centralized procedure. We find that direct price control regimes have a significantly negative impact on the launch timing. These results cannot be found when investigating the impact of indirect price controls. Our results show that Germany (65%) has the highest probability of experiencing an early launch, while it is the lowest in southern European countries (18% for Portugal and 19% for Greece). This difference accrues from both price regulation and market attractiveness, since southern European countries generally have lower prices. Due to the possibilities for parallel trade within the EU, pharmaceutical companies, by acting strategically, may further increase launch delays.
    Keywords: pharmaceuticals, regulation, new chemical entity, parallel trade
    JEL: I11 I18 L51
    Date: 2007–03
  9. By: Patricia Waeger
    Abstract: The present paper deals with a topic that pertains to Health Economics as well as to Trade Theory – Trade in Health Services. It is intended to deliver an analytical framework for the assessments of this new sector of international trade which takes into account both the ‘general welfare aspects’ and the effects for the achievement of general ‘health system goals’. While to former will be scrutinized by the subcategories allocation, accumulation and location effects, the latter is aligned with the OECD Health System Performance Framework which mentions three major health system goals that are ‘Health Improvement & Outcome’, ‘Responsiveness & Access’ and ‘Financial Contribution & Health Expenditures’. For this purpose trade in Health Services is split up according to the four modes of service supply introduced by the General Agreement of Trade in Services (GATS). For each mode examples are enclosed and the current level of trade is analysed. It is also examined what are the major obstacles for trade in these modes and what liberalization perspectives are given. The subsequent discussion and plausibility considerations of how each mode may contribute to improve efficiency as well as equity in national health systems is a systematic starting point for further research. It provides a first insight in how trade in Health Services could help to overcome resource constraints in national health systems as well as allude to the potential risks of which sight shouldn’t be lost.
    Date: 2007–07
  10. By: James Banks; Thomas Crossley; Simo Goshev
    Abstract: The paper investigates whether self-assessed health status (SAH) contains information about future mortality and morbidity, beyond the information that is contained in standard “observable” characteristics of individuals (including pre-existing diagnosed medical conditions). Using a ten-year span of the Canadian National Population Health Survey, we find that SAH does contain private information for future mortality and morbidity. Moreover, we find some evidence that the extra information in SAH is greater at older ages. Many developed countries are experiencing a major shift from defined benefit (DB) to defined contribution (DC) pension arrangements. One consequence of this shift is an effective delay in the age at which workers commit to an annuity. Our results therefore suggest that adverse selection problems in annuity markets could be more severe at older ages, and therefore, that the DB to DC shift may expose workers to greater longevity risk. This is an aspect of the DB to DC shift that has received little attention.
    Keywords: H0, I1
    Date: 2007–08
  11. By: Stephan Marette; Jutta Roosen; Sandrine Blanchemanche
    Abstract: A calibrated model is used to determine the welfare impacts of various regulatory instruments for improving health. The results of a lab experiment are integrated in a partial equilibrium model representing demands for two kinds of fish, one with higher nutritional benefits (canned sardines) and one with higher contamination risks (canned tuna) in France. In the laboratory, information about health effects leads to a statistically significant decrease (increase) in the willingness to pay for tuna (sardines). Simulations with the laboratory results show that, for most cases, a per-unit tax on tuna and a per-unit subsidy on sardines without any information revealed to consumers lead to the highest welfare, because both the tax and subsidy directly internalize health characteristics. The information policy combined with a per-unit tax on tuna and a per-unit subsidy on sardines is socially profitable only if a large proportion of consumers (greater than 95%) receives health information.
    Keywords: health, information, regulation, taxation.
    Date: 2007–08
  12. By: Silja Göhlmann
    Abstract: Smoking is associated with high economic costs, because it increases the risk and incidence of several illnesses. A promising instrument to reduce these costs is to decrease tobacco consumption by developing target group-oriented non-smoking campaigns. However, this purpose requires knowledge about the characteristics of the target group. Utilizing data from three waves of the Mikrozensus, this paper portrays the smoking population in Germany to ascertain the socio-demographic characteristics which are associated with (i) smoking prevalence and (ii) the conditional demand for cigarettes. The empirical results indicate that a target group-oriented non-smoking campaign should focus primarily on individuals with a lower level of education and income, singles, divorced or widowed individuals and unemployed, because these sub-groups of the population exhibit the highest smoking prevalence. Moreover, individuals with a lower level of education as well as singles, divorced or widowed individuals also tend to smoke more.
    Keywords: Smoking, socio-demographic characteristics, Mikrozensus
    JEL: I12
    Date: 2007–08
  13. By: Silja Göhlmann
    Abstract: This paper aims at analyzing the determinants of the decision to start smoking using data from the German Socio-Economic Panel (GSOEP). The data used is a combination of retrospective information on the age individuals started smoking and,by tracing back these individuals within the panel structure up to the point they started smoking, information on characteristics at the age of smoking initiation. In contrast to other papers, it is possible to control for the environment at the time of smoking onset that might have influenced the decision to start. Moreover, never-smokers can be distinguished from ex-smokers. I estimate discrete, but also continuous time hazard models. Results indicate that young higher educated individuals are less likely to start, whereas the hazard of starting among older individuals is not affected by education. Furthermore, parental smoking during the whole childhood significantly increases the probability to start. Almost no significant effects are found regarding parental education, labor market status and living in a large city. Price effects could not be identified, because in Germany prices did not vary during the last decades up to 2002.
    Keywords: GSOEP, youths, discrete time hazard model, log-logistic duration analysis
    JEL: I12
    Date: 2007–08
  14. By: Brigitte Dormont; Pierre-Yves Geoffard; Karine Lamiraud
    Abstract: This paper focuses on the switching behaviour of sickness fund enrollees in the Swiss health insurance system. Even though the new Federal Law on Social Health Insurance (LAMal) was implemented in 1996 to promote competition among health insurers, there still remains large premium variations within cantons. This indicates that competition has not been able so far to lead to a single price, and reveals some inertia among consumers who seem reluctant to switch to less expensive funds. We investigate one possible barrier to switching behaviour, namely the influence of the supplementary insurance on the choice for basic insurance plan in Switzerland, which has not been studied so far. Our aim is to analyse the two decisions (choice of health plan, subscription to supplementary insurance contracts). We use the data of the OFAS survey conducted in 2000 on health plan choice and import some additional data on the sickness funds (number of enrollees, premiums). The decision to switch is estimated by both logit and a fixed-effects logit models; two main explanatory variables are studied: premiums (for basic insurance contracts) and supplementary insurance. The results suggest that holding a supplementary insurance contract substantially decreases the propensity to switch. The switching decision is positively influenced by the expected gain of switching, measured by the premium differential. The expected gain of switching is higher for switchers with no supplementary insurance (CHF 19.44) than for switchers with supplementary insurance (CHF 13.06). The income level has a direct positive influence on the propensity to buy a supplementary insurance. This finding suggests that the purchase of supplementary insurance is influenced, not only by risk aversion, but also by the willingness to pay for the goods covered by the supplementary insurance, which would be higher for rich people. Bad health has a negative influence on the subscription to a supplementary contract, but is no longer significant when the income is introduced into the specification. All the information about health is captured by the income level, a low income being strongly correlated with a bad health status. Income and a supplementary insurance contract are observable by the insurance company, and can be used as tools for selection.
    Keywords: Health Insurance, Private Sector
    JEL: I18
    Date: 2007–05

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