nep-hea New Economics Papers
on Health Economics
Issue of 2008‒04‒21
eleven papers chosen by
Yong Yin
SUNY at Buffalo, USA

  1. A Closer Look at the Relationship Between Life Expectancy and Economic Growth By Azomahou, Théophile; Boucekkine, Raouf; Diene, Bity
  2. Health in Rural Tanzania: The Determinants of Health Status, Health Care Demand and Health Care Choice By Ilse Frederickx
  3. Monetary Values for Air Pollution Risk of Death: A Contingent Valuation Survey By Olivier Chanel; Stephane Luchini
  4. Life Expectancy and Human Capital Investments: Evidence From Maternal Mortality Declines By Seema Jayachandran; Adriana Lleras-Muney
  5. The Prevention of Lifestyle-Related Chronic Diseases: an Economic Framework By Franco Sassi; Jeremy Hurst
  6. "How Is Suicide Different in Japan?" By Joe Chen; Yun Jeong Choi; Yasuyuki Sawada
  7. "Suicide and Life Insurance" By Joe Chen; Yun Jeong Choi; Yasuyuki Sawada
  8. Health care deprivation profiles in the measurement of inequality and inequity: an application to GP fundholding in the English NHS By Laudicella, M; Cookson, R; Jones, A.M; Rice, N
  9. The Value of a Statistical Injury: New Evidence from the Swiss Labor Market. By Andreas Kuhn; Oliver Ruf
  10. Improving prevention compliance through appropriate incentives By Schneider, Udo; Zerth, Jürgen
  11. Public Pensions and Elderly Mortality in Canada: Comparing Means tested and Universal Eligibility, 1921 – 1966 By Herbert Emery; Jesse Matheson

  1. By: Azomahou, Théophile (UNU-MERIT); Boucekkine, Raouf (CORE, Universite Catholique de Louvain); Diene, Bity (BETA, Universite Louis Pasteur, Strasbourg)
    Abstract: We first provide a nonparametric inference of the relationship between life expectancy and economic growth on an historical data for 18 countries over the period 1820-2005. The obtained shape shows up convexity for low enough values of life expectancy and concavity for large enough values. We then study this relationship on a benchmark model combining perpetual youth" and learning-by-investing. In such a benchmark, the generated relationship between life expectancy and economic growth is shown to be strictly increasing and concave. We finally examine two models departing from perpetual youth" by assuming successively age-dependent earnings and age-dependent survival probabilities. With age-dependent earnings, the obtained relationship is hump-shaped while agedependent survival laws do reproduce the convex-concave shape detected in the prior empirical study.
    Keywords: Life expectancy, economic growth, perpetual youth, age-dependent mortality, nonparametric estimation
    JEL: O41 I20 J10
    Date: 2008
  2. By: Ilse Frederickx
    Abstract: In Tanzania, health statistics have shown slow improvement, although spending on health services in Tanzania is quite high. Defining the determinants of both health status and health use is interesting to point out possibilities for policy. Using household data of the rural Tanzanian mainland, one indicator of health status, the incidence of illness, is examined here and three health demand variables, the incidence of treatment, the level and the provider of treatment. For health outcome as well as health demand, the importance of household income in Tanzania is striking. A positive cross-effect of education on health could not be identified, except for rich Tanzanians. Distance to the nearest health facility does not matter for the poorest patients. Although the measurement of quality is problematic, the quality of the lower level medical care is found to have a positive impact on health status and on health demand, more specifically the nonwage component of quality. These results indicate that the introduction of cost recovery schemes in the Tanzanian health system may have perverse effects, if not combined with a price differentiation according to income and an improvement of quality of health facilities.
    Date: 2008–03
  3. By: Olivier Chanel (GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - Université de la Méditerranée - Aix-Marseille II - Université Paul Cézanne - Aix-Marseille III - Ecole des Hautes Etudes en Sciences Sociales - CNRS : UMR6579); Stephane Luchini (GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - Université de la Méditerranée - Aix-Marseille II - Université Paul Cézanne - Aix-Marseille III - Ecole des Hautes Etudes en Sciences Sociales - CNRS : UMR6579)
    Abstract: In this paper, we extend the individual dynamic model of life-time resource allocation to assess the monetary value given to the increase in survival probabilities of every member of a household induced by improved air quality. We then interpret this monetary value as a flow of Value of Life Years Lost (VOLY), and estimate the corresponding Value of a Prevented Fatality (VPF) for different ages and different household members. Using French contingent valuation data on air pollution, we estimate a mean VOLY of Euros 150,000 and a mean VPF<br />of Euros 2.15 million. In addition, we find an inverse U-shaped relationship between age and VPF.
    Keywords: Value of statistical life, Air pollution, Familial Altruism, Contingent Valuation
    Date: 2008–04–11
  4. By: Seema Jayachandran; Adriana Lleras-Muney
    Abstract: Longer life expectancy should encourage human capital accumulation, since a longer time horizon increases the value of investments that pay out over time. Previous work has been unable to determine the empirical importance of this life-expectancy effect due to the difficulty of isolating it from other effects of health on education. We examine a sudden drop in maternal mortality risk in Sri Lanka between 1946 and 1953, which creates a sharp increase in life expectancy for school-age girls without contemporaneous effects on health, and which also allows for the use of boys as a control group. Using additional geographic variation, we find that the 70% reduction in maternal mortality risk over the sample period increased female life expectancy at age 15 by 4.1%, female literacy by 2.5%, and female years of education by 4.0%.
    JEL: I10 I20 O15
    Date: 2008–04
  5. By: Franco Sassi; Jeremy Hurst
    Abstract: This paper provides an economic perspective on the prevention of chronic diseases, focusing in particular on diseases linked to lifestyle choices. The proposed economic framework is centred on the hypothesis that the prevention of chronic diseases may provide the means for increasing social welfare, enhancing health equity, or both, relative to a situation in which chronic diseases are simply treated once they emerge. Testing this hypothesis requires the completion of several conceptual and methodological steps. The pathways through which chronic diseases are generated must be identified as well as the levers that could modify those pathways. Justification for action must be sought by examining whether the determinants of chronic diseases are simply the outcome of efficient market dynamics, or the effect of market and rationality failures preventing individuals from achieving the best possible outcomes. Where failures exist, possible preventive interventions must be conceived, whose expected impact on individual choices should be commensurate to the extent of those failures and to the severity of the outcomes arising from them. A positive impact of such interventions on social welfare and health equity should be assessed empirically through a comprehensive evaluation before interventions are implemented. <BR>Le présent rapport appréhende dans une optique économique la question de la prévention des maladies chroniques, en mettant tout particulièrement l'accent sur celles qui sont associées au mode de vie. Le cadre économique proposé repose essentiellement sur l'hypothèse selon laquelle la prévention des maladies chroniques peut permettre d'améliorer le bien-être social ou d'accroître l'équité face à la santé, ou les deux, par rapport à une situation dans laquelle ces maladies sont simplement traitées lorsqu'elles se déclarent. Pour vérifier cette hypothèse, il faut accomplir plusieurs tâches d'ordre conceptuel et méthodologique. Il est nécessaire de cerner le processus qui aboutit à l'apparition des maladies chroniques, ainsi que les moyens susceptibles d'infléchir ce processus. Pour définir l'action à mener dans ce sens, il faut examiner si les déterminants de ces maladies sont simplement issus de la dynamique d'un marché efficient ou s'ils découlent d'une défaillance du marché et d'un défaut de rationalité qui empêchent les individus d'obtenir les meilleurs résultats possibles. Lorsqu'il y a défaillance, il est nécessaire de définir les mesures préventives qui pourraient être prises, mesures dont l'impact attendu sur les choix individuels doit être proportionnel à l'ampleur de cette défaillance et à la gravité des effets qu'elle produit. Il conviendrait d'examiner si ces mesures auront une incidence positive sur le bien-être social et l'équité face à la santé en effectuant une évaluation approfondie à l'aide de données concrètes avant leur application.
    Keywords: prevention, prévention, défaillances de marché
    JEL: H23 H51 I12 I18
    Date: 2008–03–25
  6. By: Joe Chen (Faculty of Economics, University of Tokyo); Yun Jeong Choi (Faculty of Economics, University of Tokyo); Yasuyuki Sawada (Faculty of Economics, University of Tokyo)
    Abstract: In this study, we analyze suicide rates among OECD countries, with particular effort made to gain insight into how suicide in Japan is different from suicides in other OECD countries. Several findings emerged from fixed-effect panel regressions with country-specific time-trends. First, the impacts of socioeconomic variables vary across different gender-age groups. Second, in general, better economic conditions such as high levels of income and higher economic growth were found to reduce the suicide rate, while income inequality increases the suicide rate. Third, the suicide rate is more sensitive to economic factors captured by real GDP per capita, growth rate of real GDP per capita, and the Gini index than to social factors represented by divorce rate, birth rate, female labor participation rate, and alcohol consumption. Fourth, female and elderly suicides are more difficult to be accounted for. Finally, in accordance with general beliefs, Japan's suicide problem is very different from those of other OECD countries. The impact of the socioeconomic variables on suicide is greater in Japan than in other OECD countries; moreover, the empirical result of a significant Gini index in Japan is consistent with individuals' aversion to inequality and relative deprivation, as discussed in the recent literature.
    Date: 2008–04
  7. By: Joe Chen (Faculty of Economics, University of Tokyo); Yun Jeong Choi (Faculty of Economics, University of Tokyo); Yasuyuki Sawada (Faculty of Economics, University of Tokyo)
    Abstract: In this paper, we investigate the nexus between life insurance and suicide behavior using OECD cross-country data from 1980 to 2002. Through semiparametric instrumental variable regressions with fixed effects, we find that for the majority of observations, there exists a positive relationship between suicide rate and life insurance density (premium per capita). Since life insurance policies pay death benefits even in suicide cases after the suicide exemption period, the presence of adverse selection and moral hazard suggests an incentive effect that leads to this positive relationship. The novelty of our analysis lies in the use of cross-country variations in the length of the suicide exemption period in life insurance policies as the identifying instrument for life insurance density. Our results provide compelling evidence suggesting the existence of adverse selection and moral hazards in life insurance markets in OECD countries.
    Date: 2008–04
  8. By: Laudicella, M; Cookson, R; Jones, A.M; Rice, N
    Abstract: This paper proposes a new approach to the measurement of inequality and inequity in the delivery of health care based on contributions from the literature on poverty and deprivation. This approach has some appealing characteristics: 1) inequity is additively decomposable by population subgroups; 2) the approach does not rely on socio-economic ranks; 3) it provides a graphical representation of the distribution of inequity; 4) it offers a range of indices consistent with dominance. An empirical application is provided investigating the effect of the GP fundholding reform on equity in English NHS. The results show that the most equitable GP practices self-selected into the scheme in 1991; evidence of an inequity-reducing treatment effect as well as a selfselection effect are found in 1992 and 1993; the self-selection process reduces and no evidence of a treatment effect is present thereafter.
    Keywords: inequality, inequity, health care, poverty, deprivation, dominance, GP fundholding.
    Date: 2008–04
  9. By: Andreas Kuhn; Oliver Ruf
    Abstract: This paper deals with the compensation for non-fatal accident risk in Switzerland and presents empirical estimates of the value of a statistical injury. We approach the problem of endogenous sorting of workers into jobs with different accident risks based on unobserved productivity differences twofold. First, we have access to the number of accidents not only at the level of industries, but within cells defined over industry x skill-level of the job, which allows us to estimate risk compensation within groups of workers defined over the same cells. Second, we capitalize on the partial panel structure of our data which allows us to empirically isolate the wage component specific to the employer. Our different approaches to identification in fact yield very different estimates of the value of a statistical injury. Our preferred estimate gives an estimate of about 40,000 Swiss francs (per prevented injury per year).
    Keywords: Compensating Wage Differentials, Value of a Statistical Injury, Risk Measurement, Unobserved Productivity
    JEL: J31 J17
    Date: 2008–04
  10. By: Schneider, Udo; Zerth, Jürgen
    Abstract: This paper theoretically and empirically explores the effects of insurance parameters and a complementary information environment on patient´s primary prevention activity in the context of a managed care organisation. The theoretical model is based on a principal-agent setting in which the patient is acting as an agent in deciding about his preventive effort. Both for the patient and for the insurer the information distribution about prevention efforts is diluted. Hence, the theoretical results reflect the impact of insurance parameters as well as complementary information settings. The empirical investigation sheds the light on the patient´s prevention decision in the case of smoking. This depends on age effects, education, working time and health status. The research also stresses the relationship between monetary incentive schemes and individual behaviour as well as the influence of additional information schemes. In addition to the theoretical results, there is an evidence that changes in health behaviour depend on education and individual health assessment, too.
    Keywords: Incentives in Prevention; Information distribution
    JEL: I12 C23 D82
    Date: 2008
  11. By: Herbert Emery; Jesse Matheson
    Abstract: We investigate the impact of three public pension programs on the mortality rates of recipient age groups in Canada. The Old Age Pension (OAP), introduced in 1927 for Canadians over age 70, and Old Age Assistance (OAA), implemented in 1952 for Canadians aged 65–69, were means tested programs while Old Age Security (OAS), introduced in 1952 for Canadians over age 70, was a universal plan. Our data consist of age-specific mortality rates and pension information, by province, for the period 1921–1966. The three dimensional feature of this panel allows us to exploit variation in policy implementation dates across provinces, and changes in income and age group eligibility. We find that the implementation of all three pension programs resulted in statistically significant reductions in recipient age group mortality rates and that the effect of the federal universal OAS of 1952 was twice as large as either of the means tested plans. However, the number of lives extended with the universal OAS was small and the estimated cost per life extended large.
    JEL: H51 H53 H55 I18 I32 I38 J14 N32
    Date: 2008–01–14

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