nep-hea New Economics Papers
on Health Economics
Issue of 2007‒10‒13
ten papers chosen by
Yong Yin
SUNY at Buffalo, USA

  1. Marriage, schooling, and excess mortality in prime-age adults: evidence from South Africa By Yamauchi, Futoshi
  2. Is HIV/AIDS undermining Botswana's ‘success story'? implications for development strategy: By Thurlow, James
  3. Mortality, mobility, and schooling outcomes among orphans: evidence from Malawi By Ueyama, Mika
  4. Social Interactions and Smoking By David M. Cutler; Edward L. Glaeser
  5. The Lifetime Costs and Benefits of Medical Technology By David M. Cutler
  6. Childhood Disadvantage and Obesity: Is Nurture Trumping Nature? By Patricia M. Anderson; Kristin F. Butcher; Diane Whitmore Schanzenbach
  7. Risk Tolerance and Alcohol Demand Among Adults and Older Adults By Dhaval Dave; Henry Saffer
  8. this is a test By Moreno-Serra, Rodrigo; Wagstaff, Adam
  9. Sustainability of healthcare financing in the Western Balkans : an overview of progress and challenges By Gragnolati, Michele; Bredenkamp, Caryn
  10. Optimal Retirement and Saving with Healthy Aging By David E. Bloom; David Canning; Michael Moore

  1. By: Yamauchi, Futoshi
    Abstract: "The institution of marriage plays some role in determining one's risk of exposure to HIV. Since the transmission of HIV in the population is mainly through sexual activity, avoiding infection depends on risk-avoiding behavior. Consistently, empirical results show that excess mortality is concentrated in not-yet married adults aged 20-39 among both men and women. Therefore, the choice of when and who to marry appears to be related to risk of exposure. The objective of this paper is to determine the effect that schooling has on HIV/AIDS excess mortality, using panel data from South Africa. This paper tests the hypothesis that schooling affects when and who one marries and thus impacts the risk of mortality from HIV/AIDS. The effect could be negative or positive. On the one hand, since educated agents have incentives to secure returns to their human capital in the future, more education implies earlier marriage, given that the marriage institution effectively decreases the HIV-related mortality risk. On the other hand, education increases the opportunity costs of marriage especially for women, who need to increase their time spent in the household. Thus, schooling may increase mortality risks due to the increased risk of HIV infection... Results show that schooling increases excess mortality among women, but not among men... In sum, schooling increases the opportunity cost of marriage for women, which delays marriage and increases their mortality risks in high HIV-prevalence societies, but has the opposite effect on men. Our analysis demonstrated the need to integrate our understandings of the marriage market, the labor market, schooling investments, and youth behavior to identify the determinants of AIDS-related excess mortality." from Authors' Abstract
    Keywords: Marriage, Schooling, Excess mortality, HIV/AIDS, Gender,
    Date: 2007
  2. By: Thurlow, James
    Abstract: "Despite its strong growth record, Botswana faces two prominent development challenges: the onslaught of HIV/AIDS and the slowdown in diamond mining. This study estimates the growth and distributional impact of the HIV/AIDS pandemic and considers its implications for the country's development prospects, using a dynamic computable general equilibrium and microsimulation model that accounts for the cost of treatment. The results of this analysis indicate that HIV/AIDS reduces GDP growth by 1.6 percent, increases the absolute poverty headcount by 1.5 percentage points and disproportionately hurts labor-intensive manufacturing. Therefore, while mining has dominated the recent slowdown in Botswana's growth, the present findings suggest that HIV/AIDS is undermining economic diversification. Although providing treatment is projected to reclaim a quarter of the lost growth and a third of the poverty caused by the pandemic, the fiscal burden of treatment will constrain diversification, thus underscoring Botswana's need for development assistance. Furthermore, focusing resources toward treatment may worsen inequality, since the primary beneficiaries will be middle-income and urban households. Therefore, while HIV/AIDS is undermining Botswana's success story, both unemployment and a stagnant rural economy will remain binding constraints against further pro-poor development." from Author's Abstract
    Keywords: Growth, Poverty, Economic development, HIV/AIDS,
    Date: 2007
  3. By: Ueyama, Mika
    Abstract: "A tremendous increase in the number of orphans associated with a sharp rise in prime-age adult mortality due to AIDS has become a serious problem in Sub-Saharan Africa. In fact, more than 30 percent of school-aged children have lost at least one parent in Malawi. Lack of investments in human capital and adverse conditions during childhood are often associated with lower living standards in the future. Therefore, if orphans face an increased risk of poverty, exploitation, malnutrition, and poorer access to health care and schooling, early intervention is critical so as to avoid the potential poverty trap. The purpose of this study is to investigate the impacts of orphanhood/parental death on children's mortality risks, migration behaviors, and schooling outcomes, by using household panel data from Malawi, which has the eighth-highest HIV prevalence rates in the world. A number of studies have analyzed the relationship between parental death and children's school enrollment, but very few have considered mortality and mobility of orphans. This study uses the Malawi Complementary Panel Survey (CPS) conducted by the International Food Policy Research Institute (IFPRI) and another institution between January 2000 and July 2004. Since these panel data do not track individuals that move to other households, we take into account sample attritions of children. This study uses three estimation methodologies to explore different aspects of impacts. First, we analyze regression models with controls for various sets of household and child characteristics and for village fixed effects to examine heterogeneous impacts of orphanhood across different types of households. Second, we employ household fixed-effect models to test the differential effects of orphanhood on welfare outcomes among different types of orphans living in the same household. Third, we examine the impact of recent parental death—parental death between 2000 and 2004—on schooling outcomes. Empirical results show that maternal orphans, as well as double orphans, tend to face higher mortality risks and lower schooling outcomes than paternal and non-orphans do. This is especially so for boys. Similarly, maternal and double orphans tend to move to other households more frequently. Compared to adolescent orphans, the impact on younger orphans who enrolled in school after the introduction of universal free primary education in 1994 is more muted, suggesting that free primary education policies may have mitigated adverse shocks from parental death. More interestingly, the impacts of orphanhood on schooling outcomes are significantly gender-dependent: boys face severer negative impacts of being orphans than girls do. These empirical results are robust to sample attrition due to mortality and mobility." from Authors' Abstract
    Keywords: Orphans, Mortality, HIV/AIDS, Mobility, Sample attrition, Education,
    Date: 2007
  4. By: David M. Cutler; Edward L. Glaeser
    Abstract: Are individuals more likely to smoke when they are surrounded by smokers? In this paper, we examine the evidence for peer effects in smoking. We address the endogeneity of peers by looking at the impact of workplace smoking bans on spousal and peer group smoking. Using these bans as an instrument, we find that individuals whose spouses smoke are 40 percent more likely to smoke themselves. We also find evidence for the existence of a social multiplier in that the impact of smoking bans and individual income becomes stronger at higher levels of aggregation. This social multiplier could explain the large time series drop in smoking among some demographic groups.
    JEL: I1 J12
    Date: 2007–10
  5. By: David M. Cutler
    Abstract: Measuring the lifetime costs and benefits of medical technologies is essential in evaluating technological change and determining the productivity of medical care. Using data on Medicare beneficiaries with a heart attack in the late 1980s and 17 years of follow up data, I evaluate the long-term costs and benefits of revascularization after a heart attack. I account for non-random selection into treatment with instrumental variables; following McClellan, McNeil, and Newhouse, the instrument is the differential distance to a hospital capable of providing revascularization. The results show that revascularization is associated with over 1 year of additional life expectancy, at a cost of about $40,000. Revascularization, or other treatments correlated with it, appears to be highly cost-effective.
    JEL: I11
    Date: 2007–10
  6. By: Patricia M. Anderson; Kristin F. Butcher; Diane Whitmore Schanzenbach
    Abstract: Obesity has been one of the fastest growing health concerns among children, particularly among disadvantaged children. For children overall, obesity rates have tripled from 5% in the early 1970s to about 15% by the early 2000s. For disadvantaged children, obesity rates are closer to 20%. In this paper, we first examine the impact of various measures of disadvantage on children's weight outcomes over the past 30 years, finding that the disadvantaged have gained weight faster. Over the same period, adult obesity rates have grown, and we expect parental obesity to be closely tied to children's obesity, for reasons of both nature and nurture. Thus, examining changes in the parent-child correlation in BMI should give us some insight into the ways in which the environment that parents and children share has affected children's body mass, or into how the interaction of genes and environment has changed. We find that the elasticity between mothers' and children's BMI has increased since the 1970s, suggesting that shared genetic-environmental factors have become more important in determining obesity. Despite the faster weight gain for the disadvantaged, there appears to be no clear difference for by disadvantaged group in either the parent-child elasticity or in identifiable environmental factors. On average, the increases in parents' BMI between the early 1970s and the early 2000s can explain about 37 percent of the increase in children's BMI. Although common environmental/genetic factors play a larger role now than in earlier time periods, child specific environments such as schools and day care play a potentially important role in determining children's health status.
    JEL: I1 I3
    Date: 2007–10
  7. By: Dhaval Dave; Henry Saffer
    Abstract: This study has two primary goals. These are the examination of the effect of risk tolerance on individuals' demand for alcohol and second, the examination of the demand for alcohol by older adults over the age of 55. The data sets employed are multiple waves from the Panel Study of Income Dynamics (PSID) and the Health and Retirement Study (HRS). While risk tolerance can impact the level of alcohol consumption, it may also affect the sensitivity of demand to prices. There are parallels between the economist's and the psychologist's concept of risk tolerance. Research on attitudes towards risk by psychologists is part of a larger theoretical and empirical literature on personality traits. Psychologists have found risk tolerance to be an important determinant of alcohol consumption. The empirical results indicate that risk aversion has a significant negative effect on alcohol consumption, with the prevalence and consumption among risk-tolerant individuals being six to eight percent higher. Furthermore, the tax elasticity is similar across both risk-averse and risk-tolerant individuals. This suggests that tax policies may be effective in deterring alcohol consumption even among those who have a higher propensity for alcohol use. The significance of research on alcohol demand by individuals ages 55 and older is highlighted by the increased potential for alcohol-related adverse consequences among this demographic group. Comparing younger adults (ages 21-54) with older adults, responses to taxes and prices are higher among the older sub-population. The tax elasticity is estimated at -0.05 for younger adults, compared to -0.20 for older adults.
    JEL: I1
    Date: 2007–10
  8. By: Moreno-Serra, Rodrigo; Wagstaff, Adam
    Abstract: The post-communist transition to social health insurance in many of the Central and Eastern European and Central Asian countries provides a unique opportunity to try to answer some of the unresolved issues in the debate over the relative merits of social health insurance and tax-financed health systems. This paper employs a regression-based generalization of the difference-in-differences method and instrumental variables on panel data from 28 countries for the period 1990-2004. The authors find that, controlling for any concurrent provider payment reforms, adoption of social health insurance increased national health spending and hospital activity rates, but did not lead to better health outcomes. The authors also find that adoption of social health insurance reduced employment in the economy as a whole and increased unemployment, although it did not apparently increase the size of the informal economy.
    Keywords: Health Monitoring & Evaluation,Health Systems Development & Reform,Population Policies,Health Economics & Finance,Disease Control & Prevention
    Date: 2007–10–01
  9. By: Gragnolati, Michele; Bredenkamp, Caryn
    Abstract: This paper explores the major challenges to the sustainability of health sector financing in the countries of the Western Balkans - Albania, Bosnia and Herzegovina, the Former Yugoslav Republic of Macedonia, Montenegro, Serbia and the province of Kosovo. It focuses on how the incentives created by the different elements of the healthcare financing system affect the behavior of healthcare providers and individuals, and the resulting inefficiencies in revenue collection and expenditure containment. The paper analyzes patterns of healthcare expenditure, finding that there is some evidence of cost containment, but that current expenditure levels - while similar to that in EU countries as a share of GDP - are low in per capita terms and the fiscal space to increase expenditures is extremely limited. It also examines the key drivers of current healthcare expenditure and the most significant barriers to revenue generation, identifying some key health reforms that countries in the sub-region could consider in order to enhance the efficiency and sustainability of their health systems. Data are drawn from international databases, country institutions, and household surveys.
    Keywords: Health Monitoring & Evaluation,Health Economics & Finance,Health Systems Development & Reform,Public Sector Expenditure Analysis & Management,Health Law
    Date: 2007–10–01
  10. By: David E. Bloom (Harvard School of Public Health); David Canning (Harvard School of Public Health); Michael Moore (Queen's University, Belfast)
    Abstract: We construct a model in which retirement occurs at the end of life as a result of declining health. We show that improvements in life expectancy, coupled with a delay in the onset of disability, create a wealth effect that increases both the optimal consumption level and the proportion of life spent in leisure. For social security systems whose goal is to mimic optimal behavior, the appropriate response to longer, healthier lives is to reduce contribution rates and increase benefit rates, funded by an increase in the retirement age that is less than proportional to the increase in life expectancy.
    Keywords: aging, health, retirement, savings
    Date: 2007–10

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