nep-hea New Economics Papers
on Health Economics
Issue of 2008‒06‒07
eighteen papers chosen by
Yong Yin
SUNY at Buffalo, USA

  1. Child labor and schooling responses to production and health shocks in northern Mali: By Dillon, Andrew
  2. Marriage behavior response to prime-age adult mortality: Evidence from Malawi By Ueyama, Mika; Yamauchi, Futoshi
  3. Monitoring and norms in sickness insurance: empirical evidence from a natural experiment By Hesselius, Patrik; Johansson, Per; Vikström, Johan
  4. Climate Variability and Health: Sweden 1751-2004 By Krüger, Niclas A
  5. The Effect of Disability Insurance on Health Investment: Evidence from the VA Disability Compensation Program By Perry Singleton
  6. Public Sentiment and Tobacco Control Policy By Perry Singleton
  7. Under the Weather: Health, Schooling, and Economic Consequences of Early-Life Rainfall By Sharon L. Maccini; Dean Yang
  8. Health, Human Capital, and African American Migration Before 1910 By Trevon D. Logan
  9. Effects of Regulation on Drug Launch and Pricing in Interdependent Markets By Patricia M. Danzon; Andrew J. Epstein
  10. Cigarette Taxes and the Transition from Youth to Adult Smoking: Smoking Initiation, Cessation, and Participation By Philip DeCicca; Donald S. Kenkel; Alan D. Mathios
  11. Health Workforce and International Migration: Can New Zealand Compete? By Pascal Zurn; Jean-Christophe Dumont
  12. Food Price Policies and the Distribution of Body Mass Index: Theory and Empirical Evidence from France. By Etilé, F
  13. Use of propensity scores in non-linear response models: The case for health care expenditures. By Basu, A; Polsky, D; Manning, W G
  14. Cigarette smoking, pregnancy, forward looking behavior and dynamic inconsistency By Ciccarelli, Carlo; Giamboni, Luigi; Waldmann, Robert
  15. The Impact of Disability on Earnings and Labour Force Participation in Canada: Evidence from the 2001 PALS By Herbert Emery; Cara L. Brown
  16. Doctors, Patients, and the Racial Mortality Gap: What Are the Causes? By Eric A. Verhoogen
  17. Why do some Irish drink so much? By Liam Delaney; Arie Kapteyn; James P. Smith
  18. The Impact of Childhood Health on Adult Labor Market Outcomes By James P Smith

  1. By: Dillon, Andrew
    Abstract: "This paper investigates children's time allocation to schooling, home production, and market production using a unique data set collected from northern Mali. Production shocks from harvest period pest infestations induce households to withdraw children from school and increase the probability that they are selected into farm work. Health shocks to women increases the probability that a child participates in the family business and childcare activities. These results are robust to varying assumptions about the structure of unobserved heterogeneity at the household and village levels. Different measures of household assets are also constructed to test whether assets serve as a buffer against increased child labor in response to shocks. Assets such as livestock have mixed effects on child labor and schooling, depending on the shock and asset type. However, household durables are substitutes for increased child labor when households face health shocks." from Author's Abstract
    Keywords: Child labor, Production shocks, Health shocks, Labor substitution effects, Schooling, Education, Gender, Women,
    Date: 2008
  2. By: Ueyama, Mika; Yamauchi, Futoshi
    Abstract: "This paper examines the effect of AIDS-related mortality of the prime-age adult population on marriage behavior among women in Malawi. A rise in prime-age adult mortality increases risks associated with the search for a marriage partner in the marriage market. A possible behavioral change in the marriage market in response to an increase in prime-age adult mortality is for marriage to occur earlier to avoid women's exposure to HIV/AIDS risks under the condition that the risks are higher during singlehood. We test this hypothesis using micro data from Malawi, where prime-age adult mortality has drastically increased. In the analysis, we estimate prime-age adult mortality that sample women have observed during the adolescent period by utilizing retrospective information on the death of their siblings. Empirical analysis shows that excess prime-age adult mortality observed in the local marriage market (district) lowers the marriage age for females and reduces their premarital sexual activities. Since a lower age for first marriage implies less schooling completed, we expect that the average schooling achievement among women would decline. This behavioral change also implies a longer reproduction period during their marriage, which may lead to a higher fertility rate. However, the second implication should be discounted if the reduction of sexual activities also applies to the married population. Lower schooling attainment among women has further implications on human capital formation in the next generation." from Author's Abstract
    Keywords: HIV/AIDS, Marriage, Sexual behavior,
    Date: 2008
  3. By: Hesselius, Patrik (Institute for Labour Market Policy Evaluation); Johansson, Per (IFAU - Institute for Labour Market Policy Evaluation); Vikström, Johan (IFAU- Institute for Labour Market Policy Evaluation)
    Abstract: We test if social work norms are important for work absence due to self-perceived sickness. To this end, we use a randomized social experiment designed to estimate the effect of monitoring on work absence. The treated were exposed to less monitoring of their eligibility to use sickness insurance, which increased their non-monitored work absence. Based on a difference in differences analysis, we find that the not directly treated also increased their absence as a result of the experiment. By using an instrumental variables estimator, we find significant endogenous social interaction effects. A 10 per cent exogenous shock in work absence would lead to an immediate 5.7 per cent decrease in the hazard out of sickness absence: the long-run effect is calculated as a 13.3 per cent decrease in the corresponding hazard.
    Keywords: Work norms; social insurance; social interactions; sickness absence
    JEL: C14 C23 C41 J22 Z13
    Date: 2008–05–16
  4. By: Krüger, Niclas A (Department of Business, Economics, Statistics and Informatics)
    Abstract: Several studies have examined the link between climate and health, mainly focusing on the short term impacts of extreme temperatures. This paper analyzes instead the long term relation between climate variability and health using Swedish temperature and mortality data for the period 1751-2004 using different time scales. We find that periods with higher temperature are associated with lower mortality. The results indicate that long term climate variations in annual mean temperatures and not short term variations explain the connection between temperature and mortality. Considering annual extreme temperatures, we find that extreme low winter temperatures are correlated with higher short term mortality. We identify the impact of the 11-year solar cycle on crop yields as a possible explanation for our findings. The results have besides their economic-historical merits implications for modern day policy for developing countries, especially since the correlation with solar activity implies predictability.
    Keywords: Mortality; Wavelet; Climate
    JEL: I18 N53 N54 Q54
    Date: 2008–05–30
  5. By: Perry Singleton (Center for Policy Research, Maxwell School, Syracuse University, Syracuse, NY 13244-1020)
    Abstract: I examine whether individuals respond to monetary incentives to detect latent medical conditions. The effect is identified by an amendment to Title 38 that deemed diabetes associated with Agent Orange exposure a compensable disability under the VA's Disability Compensation program. Since a diagnosis is a requisite for benefit eligibility, and nearly one-third of diabetics remain undiagnosed, the advent of disability insurance may have encouraged the detection of diabetes among the previously undiagnosed population. Evidence from the National Health Interview Survey suggests that the policy increased the prevalence of diabetes b 2.7 percentage ponts among veterans.
    Keywords: Human capital investment, health, diabetes, Vietnam veterans, Agent Orange
    JEL: H0 I12
    Date: 2008–05
  6. By: Perry Singleton (Center for Policy Research, Maxwell School, Syracuse University, Syracuse, NY 13244-1020)
    Abstract: The well-documented correlation between cigarette excise taxes and cigarette demand may not be entirely causal if excise taxes reflect public sentiment towards smoking. I consider whether proxies for smoking sentiment--the prevalence of smoking by education and intention to quit statuses--are correlated with support for and implementation of tobacco control laws. I find that cigarette excise taxes are most sensitive to the prevalence of educated smokers who do not want to quit. Additionally, when proxies for public sentiment are included, the estimated elasticity of cigarette demand declines from -2.0 to -1.3.
    Keywords: Cigarette demand, excise taxes, legislative endogeneity
    JEL: H23 I18
    Date: 2008–05
  7. By: Sharon L. Maccini; Dean Yang
    Abstract: How sensitive is long-run individual well-being to environmental conditions early in life? This paper examines the effect of weather conditions around the time of birth on the health, education, and socioeconomic outcomes of Indonesian adults born between 1953 and 1974. We link historical rainfall for each individual's birth-year and birth-location with current adult outcomes from the 2000 wave of the Indonesia Family Life Survey. Higher early-life rainfall has large positive effects on the adult outcomes of women, but not of men. Women with 20% higher rainfall (relative to normal local rainfall) in their year and location of birth are 3.8 percentage points less likely to self-report poor or very poor health, attain 0.57 centimeters greater height, complete 0.22 more grades of schooling, and live in households that score 0.12 standard deviations higher on an asset index. These patterns most plausibly reflect a positive impact of rainfall on agricultural output, leading to higher household incomes and food availability and better health for infant girls. We present suggestive evidence that eventual benefits for adult women's socioeconomic status are most strongly mediated by improved schooling attainment, which in turn improves socioeconomic status in adulthood.
    JEL: I1 I2 I3 O1 O15 Q5
    Date: 2008–05
  8. By: Trevon D. Logan
    Abstract: This is the first paper to document the effect of health on the migration propensities of African Americans in the American past. Using both IPUMS and the Colored Troops Sample of the Civil War Union Army Data, I estimate the effects of literacy and health on the migration propensities of African Americans from 1870 to 1910. I find that literacy and health shocks were strong predictors of migration and the stock of health was not. There were differential selection propensities based on slave status - former slaves were less likely to migrate given a specific health shock than free blacks. Counterfactuals suggest that as much as 35% of the difference in the mobility patterns of former slaves and free blacks is explained by differences in their human capital, and more than 20% of that difference is due to health alone. Overall, the selection effect of literacy on migration is reduced by one-tenth to one-third once health is controlled for. The low levels of human capital accumulation and rates of mobility for African Americans after the Civil War are partly explained by the poor health status of slaves and their immediate descendants.
    JEL: I1 I2 J1 J2 N3
    Date: 2008–05
  9. By: Patricia M. Danzon; Andrew J. Epstein
    Abstract: This study examines the effect of price regulation and competition on launch timing and pricing of new drugs. Our data cover launch experience in 15 countries for drugs in 12 therapeutic classes that experienced significant innovation over the decade 1992-2003. We use prices of established products as a measure of the direct effect of a country's own regulatory system, and find that launch timing and prices of innovative drugs are influenced by prices of established products. Thus, if price regulation reduces drug prices, it contributes to launch delay in the home country. New drug launch hazards and launch prices in low-price countries are also affected by referencing by other, high-price countries, especially within the EU, as expected if manufacturers delay launch in low-price markets to avoid undermining higher prices in other countries. Thus, referencing policies adopted in high-price countries can impose welfare loss on low-price countries. Prices of new drugs are influenced mainly by prices of other drugs within the same subclass; however, dynamic competition from new subclasses undermines new drug launch in older subclasses. Association with a local firm accelerates launch only in certain regulated markets. These findings have implications for US proposals to constrain pharmaceutical prices in the US through external referencing and drug importation.
    JEL: I11 I18 K2 L5 L65
    Date: 2008–05
  10. By: Philip DeCicca; Donald S. Kenkel; Alan D. Mathios
    Abstract: Policy makers continue to advocate and adopt cigarette taxes as a public health measure. Most previous individual-level empirical studies of cigarette demand are essentially static analyses. In this study, we use longitudinal data to examine the dynamics of young adults' decisions about smoking initiation and cessation. We develop a simple model to highlight the distinctions between smoking initiation, cessation, and participation and show that the price elasticity of smoking participation is a weighted average of corresponding initiation and cessation elasticities, a finding that applies more broadly to other addictive substances as well. The paper's remaining contributions are empirical. We use data from the 1992 wave of the National Education Longitudinal Study, when most of the cohort were high school seniors, and data from the 2000 wave, when they were about 26 years old. The results show that the distinction between initiation and cessation is empirically useful. We also contribute new estimates on the tax-responsiveness of young adult smoking, paying careful attention to the possibility of bias if hard-to-observe differences in anti-smoking sentiment are correlated with state cigarette taxes. We find no evidence that higher taxes prevent smoking initiation, but some evidence that higher taxes are associated with increased cessation.
    JEL: I12
    Date: 2008–05
  11. By: Pascal Zurn; Jean-Christophe Dumont
    Abstract: This paper examines health workforce and migration policies in New Zealand, with a special focus on the international recruitment of doctors and nurses. 2. The health workforce in New Zealand, as in all OECD countries, plays a central role in the health system. Nonetheless, maybe more than for any other OECD country, the health workforce in New Zealand cannot be considered without taking into account its international dimension. 3. New Zealand has the highest proportion of migrant doctors among OECD countries, and one of the highest for nurses. There is no specific immigration policy for health professionals, although the permanent and temporary routes make it relatively easy for doctors and nurses who can get their qualification recognised to immigrate in New Zealand. At the same time, New Zealand also has high emigration rates of health workers, mainly to other OECD countries. International migration is thus at the same time an opportunity and a challenge for the management of the human resources for health (HRH) in New Zealand. 4. Increasing international competition for highly skilled workers raises important issues such as sustainability and ability to compete in a global market. In this context, new approaches to improve the international recruitment of health workers, as well as developing alternative policies, may need to be considered. As for international recruitment, better coordination and stronger collaboration between main stakeholders could contribute to more effective and pertinent international recruitment. <BR>5. Ce document examine les effectifs de professionnels de la santé et les politiques migratoires de la Nouvelle-Zélande, en se concentrant plus particulièrement sur le recrutement international de médecins et d'infirmières. 6. En Nouvelle-Zélande comme dans tous les pays de l'OCDE, ces professionnels jouent un rôle crucial dans le système de santé. Dans ce pays, pourtant, peut-être plus que dans tout autre pays de l'OCDE, on ne saurait étudier les travailleurs de la santé sans prendre en compte la dimension internationale de cette population. 7. La Nouvelle-Zélande compte la proportion de médecins immigrés la plus élevée de tous les pays de l'OCDE, celle des infirmières immigrées comptant aussi parmi les plus fortes. Le pays ne s'est pas doté d'une politique d'immigration particulière concernant ces professions même si Les filières d'immigration permanente ou temporaire font qu'il est relativement facile pour les médecins et les infirmières qui parviennent à faire reconnaître leurs diplômes d'aller s'installer en Nouvelle-Zélande. En parallèle, le pays présente également des taux élevés d'émigration de travailleurs de la santé (principalement vers les autres pays de l'OCDE). En matière de gestion des ressources humaines de la santé, les migrations internationales représentent donc à la fois une chance et une difficulté pour la Nouvelle-Zélande. 8. La concurrence internationale croissante pour attirer des travailleurs hautement qualifiés soulève des problèmes importants comme la soutenabilité et la capacité à affronter cette concurrence sur un marché mondialisé. Dans ce contexte, il faudrait peut-être réfléchir à de nouvelles stratégies pour améliorer le recrutement international de travailleurs de la santé et élaborer d'autres mesures possibles. Quant à ce recrutement, l'amélioration de la coordination et le renforcement de la collaboration entre les principales parties prenantes pourraient contribuer à le rendre plus effectif et plus approprié.
    JEL: F22 I10 J12
    Date: 2008–05–22
  12. By: Etilé, F
    Abstract: This paper uses French food expenditures data to examine the e¤ect of the prices of 23 food product categories on the distribution of Body Mass Index (BMI) in a sample of French adults. A dynamic choice model that uses standard assumptions from Physiology is developed. It is shown that the slope of the price-BMI relationship is a¤ected by the individual’s Physical Activity Level (PAL). When the latter is unobserved, identi…cation of price e¤ects at conditional quantiles of the BMI distribution requires quantile independence between PAL and the covariates, especially income. Then, using quantile regression results, unconditional BMI distributions can be simulated for various price policies. It is found that increasing the price of beverages, fats and sugars and sweets by 10%, and decreasing the price of fruits and vegetables by 10% would reduce the prevalence of overweight and obesity by 5 and 7 percentage points respectively. Correspondance : Fabrice Etilé,; INRA, UR 1303 - ALISS, 65 rue de Brandebourg, F-94205 Ivry-sur-Seine. I am grateful to Christine Boizot-Szantai for research assistance, to Olivier Allais, Arnaud Basdevant, Pierre Dubois, Sébastien Lecocq and Anne- Laure Samson for discussions and suggestions, and to seminar participants at the 2005 EAAE Congress (Copenhaguen), INRA-IDEI (Toulouse), INRA-GAEL (Grenoble), York Seminar in Health Econometrics (U.York), INRA-EC (Blois), JESF 2007 (Lille), SFER conference (Paris), and Erasmus School of Economics (Rotterdam) for helpful comments on various versions of this paper.
    Date: 2008–05
  13. By: Basu, A; Polsky, D; Manning, W G
    Abstract: Under the assumption of no unmeasured confounders, a large literature exists on methods that can be used to estimating average treatment effects (ATE) from observational data and that spans regression models, propensity score adjustments using stratification, weighting or regression and even the combination of both as in doubly-robust estimators. However, comparison of these alternative methods is sparse in the context of data generated via nonlinear models where treatment effects are heterogeneous, such as is in the case of healthcare cost data. In this paper, we compare the performance of alternative regression and propensity score-based estimators in estimating average treatment effects on outcomes that are generated via non-linear models. Using simulations, we find that in moderate size samples (n= 5000), balancing on estimated propensity scores balances the covariate means across treatment arms but fails to balance higher-order moments and covariances amongst covariates, raising concern about its use in non-linear outcomes generating mechanisms. We also find that besides inverse-probability weighting (IPW) with propensity scores, no one estimator is consistent under all data generating mechanisms. The IPW estimator is itself prone to inconsistency due to misspecification of the model for estimating propensity scores. Even when it is consistent, the IPW estimator is usually extremely inefficient. Thus care should be taken before naively applying any one estimator to estimate ATE in these data. We develop a recommendation for an algorithm which may help applied researchers to arrive at the optimal estimator. We illustrate the application of this algorithm and also the performance of alternative methods in a cost dataset on breast cancer treatment.
    Keywords: Propensity score, Non-linear regression, average treatment effect, Healthcare costs
    JEL: C01 C21 I10
    Date: 2008–05
  14. By: Ciccarelli, Carlo; Giamboni, Luigi; Waldmann, Robert
    Abstract: This paper addresses two aspects of the model of rational addiction: forward looking behavior and time consistent preferences. It explores smoking by women before, during and after pregnancy using the European Community Household Panel (ECHP). Pregnancy is used as an instrument for a partially predictable future decrease in smoking. Women reduce the average number of cigarettes they smoke and many quit in the period 10 to 15 months before the birth of a child. Our analysis suggests that this effect may be stronger for married than for unmarried women, corresponding to the higher probability that the pregnancies of married women are planned. Pregnancy is also used as an instrument to estimate the parameters of a structural model of addiction. The estimates imply that cigarettes are highly addictive. Finally, we present statistically significant evidence that, even when the expected number of cigarettes smoked one month after the interview is taken into account, expected smoking further in the future has an independent effect on current consumption. This effect remains even when we impose the highest theoretically possible coefficient on expected cigarettes smoked one month after the interview. This means that the null of time consistency is (barely) rejected against the alternative of time inconsistency.
    JEL: I12
    Date: 2007–08–15
  15. By: Herbert Emery; Cara L. Brown
    Abstract: Using Statistics Canada’s 2001 Participation and Activity Limitation Survey (PALS) we examine the impact of disability on the annual earnings and labour force participation of Canadian men and women. Our estimates show large earnings penalties associated with disability ranging from 21 percent for mild disabilities to over 50 percent for very severe disabilities. We also find that disability is associated with a 30 percentage point reduction in labour force participation Our estimates of the impact of disability are comparable to other studies for more severe disability but our estimates of the impact of milder disabilities are substantially and significantly larger. This difference likely reflects improvements in the PALS design over previous Canadian surveys in accurately identifying mild disability versus non-disability. It is also a possibility that over the economic expansion of the 1990s, disabled individuals in the Canadian labour market fell behind their able bodied counterparts
    Date: 2008–01–27
  16. By: Eric A. Verhoogen (Columbia University - Department of Economics)
    Abstract: Disparities in health outcomes between white and minority Americans are a significant and well documented challenge in improving equity in health care. Two frequently cited explanations are discrimination in treatment - doctors treating minority patients differently, and unequal access to care - patients being trapped in facilities of inferior quality. I use a new dataset from the Department of Veterans Affairs and employ a novel estimation strategy to investigate the sources of the racial gap in mortality for chronic heart disease, the most expensive chronic condition in the elderly. I find that racial differences in mortality persist even when the quality of clinics and doctors is controlled for. Investigating the doctor-patient interaction, I show that doctor quality significantly influences patient outcomes. While minority patients visit slightly less competent doctors, this does not explain the large gap in survival. Individual doctors are found to treat their patients similarly regardless of race. On the patient side, I demonstrate that variation in compliance triggers a racial mortality gap. Differences in patient response to treatment significantly alter survival probabilities. Considerable reductions in medical costs could be achieved by convincing patients of the importance of strictly following the therapy regimen. I estimate that targeting compliance patterns could reduce the black-white mortality gap by at least two-thirds.
    Date: 2008
  17. By: Liam Delaney (School of Public Health & Population Science, School of Economics & Geary Institute, University College Dublin); Arie Kapteyn (RAND Corporation & Geary Institute, University College Dublin); James P. Smith (RAND Corporation & Geary Institute, University College Dublin)
    Date: 2008–04–17
  18. By: James P Smith (Visiting Professor of Economics, University College Dublin + The RAND Corporation)
    Abstract: This paper examines impacts of childhood health on SES outcomes observed during adulthood- levels and trajectories of education, family income, household wealth, individual earnings and labor supply. The analysis is conducted using data that collects these SES measures in a panel who were originally children and who are now well into their adult years. Since all siblings are in the panel, one can control for unmeasured family and neighborhood background effects. With the exception of education, poor childhood health has a quantitatively large effect on all these outcomes. Moreover, these estimated effects are larger when unobserved family effects are controlled.
    JEL: I10 J00
    Date: 2008–04–21

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