nep-hea New Economics Papers
on Health Economics
Issue of 2008‒08‒21
seventeen papers chosen by
Yong Yin
SUNY at Buffalo, USA

  1. An Analysis of Mental Stress in Ireland, 1994-2000 By David Madden
  2. Health and Income Poverty in Ireland, 2003-2006 By David Madden
  3. Ordinal and Cardinal Measures of Health Inequality - An Empirical Comparison By David Madden
  4. Why do some Irish drink so much? By Liam Delaney; Arie Kapteyn; James P Smith
  5. The Determinants of Self-Rated Health in the Republic of Ireland - Further Evidence and Future Directions By Liam Delaney; Colm Harmon; Cecily Kelleher; Caroline Kenny
  6. Gender Differences in Mental Well-Being - A Decomposition Analysis By David Madden
  7. Big and tall parents do not have more sons By Kevin Denny
  8. Health Interventions and Risky Behaviour By David Madden
  10. The Effect of Classmate Characteristics on Individual Outcomes: Evidence from the Add Health By Robert Bifulco; Jason Fletcher; Stephen Ross
  11. Intellectual Property and Public Health: An Overview of the Debate with a Focus on U.S. Policy By Carsten Fink
  12. Risk Aversion and Physical Prowess: Prediction, Choice and Bias By Sheryl Ball; Catherine C. Eckel; Maria Heracleous
  13. Does a pint a day affect your child's pay? The effect of prenatal alcohol exposure on adult outcomes By Peter Nilsson
  14. Why the DEA STRIDE Data are Still Useful for Understanding Drug Markets By Jeremy Arkes; Rosalie Liccardo Pacula; Susan M. Paddock; Jonathan P. Caulkins; Peter Reuter
  15. Organizational Fragmentation and Care Quality in the U.S. Health Care System By Randall D. Cebul; James B. Rebitzer; Lowell J. Taylor; Mark Votruba
  16. HIV and Fertility in Africa: First Evidence from Population Based Surveys By Chinhui Juhn; Sebnem Kalemli-Ozcan; Belgi Turan
  17. Smoking Intensity, Compensatory Behavior and Tobacco Tax Policy By Ian Irvine

  1. By: David Madden (University College of Dublin)
    Abstract: The General Health Questionnaire (GHQ) is frequently used as a measure of mental well-being with those people with values below a certain threshold regarded as suffering from mental stress. Comparison of mental stress levels across populations may then be sensitive to the chosen threshold. This paper uses stochastic dominance techniques to show that mental stress fell in Ireland over the 1994 to 2000 period regardless of the threshold chosen. Decomposition techniques suggest that changes in the proportion unemployed and in the protective effect of income, education and marital status upon mental health were the principal factors underlying this fall.
    Keywords: GHQ, mental stress, dominance, decomposition
    JEL: I12 I31 I32
    Date: 2007–07–30
  2. By: David Madden (University College of Dublin)
    Abstract: Recent advances in the measurement of bi-dimensional poverty are applied to a measure of poverty which incorporates income and health poverty. The correlation between income and poverty is examined using the Receiver Operating Characteristics curve. Following from this unidimensional and bi-dimensional poverty indices are calculated for Ireland for the years 2003-2006. Individual and bi-dimensional indices generally show a decline over the period with the biggest decline between 2003 and 2004. The results are generally not sensitive to the degree of poverty aversion or the substitutability between the different dimensions of poverty.
    Keywords: receiver operating characteristic, multidimensional poverty
    JEL: I12 I31 I32
    Date: 2008–07–20
  3. By: David Madden (University College of Dublin)
    Abstract: When measuring health inequality using ordinal data, analysts typically must choose between indices specifically based upon ordinal data and more standard indices using ordinal data which has been transformed into cardinal data. This paper compares inequality rankings across a number of different approaches and finds considerable sensitivity to the choice between ordinal and cardinal based indices. There is relatively little sensitivity to the ethical choices made by the analyst in terms of the weight attached to different parts of the distribution.
    Keywords: Inequality, cardinal, ordinal
    JEL: D63 I18 I31
    Date: 2008–05–05
  4. By: Liam Delaney (University College of Dublin); Arie Kapteyn (Rand Corporation); James P Smith (Rand Corporation)
    Date: 2008–04–21
  5. By: Liam Delaney (University College of Dublin); Colm Harmon (University College of Dublin); Cecily Kelleher (University College of Dublin); Caroline Kenny (University College of Dublin)
    Abstract: This paper examines the determinants of self-rated health in the Republic of Ireland using data from the 2001 Quarterly National Household Survey Health Module and the 2005 ESRI Time Usage Survey. Results indicate that self-rated health is a useful proxy for self-reported chronic illness indices. Higher education, having private medical insurance cover and being married is associated with better self-rated health. The strong inverse relationship between age and self-rated health is found to be robust to the inclusion of self-reported morbidity. Caregivers display lower self-rated health, even after controlling for age, marital status and education. We find only minor effects of gender. Understanding further the causal nature of the above associations is a key issue for future research.
    Date: 2008–04–21
  6. By: David Madden (University College of Dublin)
    Abstract: The General Health Questionnaire (GHQ) is frequently used as a measure of mental well-being. A consistent pattern across countries is that women report lower levels of mental well-being, as measured by the GHQ. This paper applies decomposition techniques to Irish data for 1994 and 2000 to examine the factors lying behind the gender differences in GHQ score. For 1994 most of the difference is accounted for by characteristics while in 2000 most of the difference arises from returns to characteristics. The issue of path dependence, or choice of reference group, is shown to be important, mostly arising from the differing effect of principal economic status on men and women.
    Keywords: GHQ, decomposition, path dependence
    JEL: I12 I31 I32
    Date: 2008–01–21
  7. By: Kevin Denny (University College of Dublin)
    Abstract: In a 2005 paper Kanezawa proposed a generalisation of the classic Trivers- Willard hypothesis. It was argued that as a result taller and heavier parents should have more sons relative to daughters. Using two British cohort studies, evidence was presented which was partly consistent with the hypothesis. I analyse the relationship between an individual being male and their parents’ height and weight using one of the datasets. No evidence of any such relationship is found.
    Date: 2007–11–07
  8. By: David Madden (University College of Dublin)
    Abstract: This paper reviews the extent to which policy interventions can affect risky behaviours such as smoking, drinking and diet. The justification for such intervention is typically a market failure, broadly defined. The types of market failure typically encountered are discussed. First and second best interventions are examined and there is a review of the efficacy of such interventions with respect to Ireland.
    Keywords: Risky behaviour, market failure
    JEL: I12 I18 D62
    Date: 2007–07–21
  9. By: Laura Crespo (CEMFI, Centro de Estudios Monetarios y Financieros)
    Abstract: In this paper we estimate the causal effect of providing “intensive” informal care to elderly parents on labour market participation decisions for European women who are themselves approaching retirement. In particular, we consider the frequency or intensity of this help and we focus on informal care provided in a daily or weekly basis. We use two different but comparable samples drawn from the Survey of Health, Ageing and Retirement in Europe (SHARE) that provide complementary detailed information about daughters and parents. We obtain evidence about this question for two groups of European countries that strongly differ in terms of informal caregiving intensity within the immediate family and the use of formal care: the northern countries (Sweden, Denmark and The Netherlands), and the southern countries (Spain, Italy and Greece). The results show that the estimated effect of providing “intensive” informal care to elderly parents on the probability of labour participation is negative and large for both groups of countries. Furthermore, a substantially stronger effect is found when the “intensive” caregiving variable is treated as endogenous in the labour participation equation. This shows that the potential opportunity costs in terms of (reduced) employment associated with the provision of informal care by women are seriously underestimated under the exogeneity assumption of the caregiving regressor.
    Keywords: Binary choice, labour force participation decisions, parental informal caregiving, endogenous variables, simultaneous estimation.
    JEL: J2 C3 D1
    Date: 2006–12
  10. By: Robert Bifulco (Syracuse University); Jason Fletcher (Yale University); Stephen Ross (University of Connecticut)
    Abstract: We use data from the National Longitudinal Study of Adolescent Health (Add Health) to examine the effects of classmate characteristics on economic and social outcomes of students. The unique structure of the Add Health allows us to estimate these effects using comparisons across cohorts within schools, and to examine a wider range of outcomes than other studies that have used this identification strategy. We find that increases in the percent of classmates whose mother is college educated has significant, desirable effects on educational attainment and substance use. We do not find much evidence that the percent of classmates who are black or Hispanic has negative effects on individual outcomes, on average, but increases in the percent black or Hispanic does increase drop out rates among black students.
    Keywords: Education, Peer Effects, Cohort Study, Substance Abuse
    JEL: I21 I19 J13 J15
    Date: 2008–08
  11. By: Carsten Fink
    Abstract: Over the past fifteen years, the United States and other developed countries have employed trade agreements to substantially strengthen the protection of intellectual property rights for pharmaceutical products in the developing world. The associated rules changes have already had an effect on pharmaceutical prices in developing countries, prompting conflicts between developing country governments seeking to promote drug access and Western pharmaceutical companies wishing to protect their exclusive rights. If anything, such conflicts are bound to intensify as more patent protected drugs enter pharmaceutical markets outside rich countries. This paper describes the global shift in intellectual property policies and employs economic analysis to evaluate its consequences for developing countries. It also puts forward several recommendations for policymakers in developing countries and in the United States, seeking to better reconcile innovation incentives and access needs.
    Keywords: intellectual property, international health, public health
    Date: 2008–06
  12. By: Sheryl Ball; Catherine C. Eckel; Maria Heracleous
    Abstract: This paper reports on experiments where individuals are asked to make risky decisions for themselves as well as predicting the risky decisions of others. Prior research has generally shown that people expect women to be more risk averse than men and that they, in fact are - a result we also find. We ask whether this is a pure gender effect or whether there is more to this result. In particular, both evolutionary and economic theories suggest that physically stronger decision makers should make riskier decisions, suggesting physical prowess as an underlying cause of gender differences. These experiments explore whether risk aversion is associated with a number of measures of real and perceived physical prowess. We find that forecasters consistently predict the types of risky decision produced by both gender and physical prowess, but often at magnitudes that significantly exaggerate than actual differences. Sources of bias are also examined, showing that specific characteristics of the target and predictor lead to over-estimation or under-estimation of risk preferences.
    Keywords: Risk Aversion, Physical Risk, Experiment, Gender, Stereotyping
    Date: 2008
  13. By: Peter Nilsson
    Abstract: <p>This paper utilizes a Swedish alcohol policy experiment conducted in the late 1960s to identify the impact of prenatal alcohol exposure on educational attainments and labor market outcomes. The experiment started in November 1967 and was prematurely discontinued in July 1968 due to a sharp increase in alcohol consumption in the experimental regions, particularly among youths. Using a difference-in-difference-in-differences estimation strategy we find that around the age of 30 the cohort in utero during the experiment has substantially reduced educational attainments, lower earnings and higher welfare dependency rates compared to the surrounding cohorts. The results indicate that investments in early-life health have far-reaching effects on economic outcomes in later life.</p>
    Date: 2008–08
  14. By: Jeremy Arkes; Rosalie Liccardo Pacula; Susan M. Paddock; Jonathan P. Caulkins; Peter Reuter
    Abstract: In 2001, use of the STRIDE data base for the purposes of analyzing drug prices and the impact of public policies on drug markets came under serious attack by the National Research Council (Manski et al., 2001; Horowitz, 2001). While some of the criticisms raised by the committee were valid, many of the concerns can be easily addressed through more careful use of the data. In this paper, we first disprove Horowitz's main argument that prices are different for observations collected by different agencies within a city. We then revisit other issues raised by the NRC and discuss how certain limitations can be easily overcome through the adoption of random coefficient models of drug prices and by paying serious attention to drug form and distribution levels. Although the sample remains a convenience sample, we demonstrate how construction of city-specific price and purity series that pay careful attention to the data and incorporate existing knowledge of drug markets (e.g. the expected purity hypothesis) are internally consistent and can be externally validated. The findings from this study have important implications regarding the utility of these data and the appropriateness of using them in economic analyses of supply, demand and harms.
    JEL: H3 I18 K42
    Date: 2008–08
  15. By: Randall D. Cebul; James B. Rebitzer; Lowell J. Taylor; Mark Votruba
    Abstract: Many goods and services can be readily provided through a series of unconnected transactions, but in health care close coordination over time and within care episodes improves both health outcomes and efficiency. Close coordination is problematic in the US health care system because the financing and delivery of care is distributed across a variety of distinct and often competing entities, each with its own objectives, obligations and capabilities. These fragmented organizational structures lead to disrupted relationships, poor information flows, and misaligned incentives that combine to degrade care quality and increase costs. We illustrate our argument with examples taken from the insurance and the hospital industries, and discuss possible responses to the problems resulting from organizational fragmentation.
    JEL: D2 I11 I12 I18
    Date: 2008–08
  16. By: Chinhui Juhn; Sebnem Kalemli-Ozcan; Belgi Turan
    Abstract: The historical pattern of the demographic transition suggests that fertility declines follow mortality declines, followed by a rise in human capital accumulation and economic growth. The HIV/AIDS epidemic threatens to reverse this path. A recent paper by Young (2005), however, suggests that similar to the "Black Death" episode in Europe, HIV/AIDS will actually lead to higher growth per capita among the affected African countries. Not only will population decline, behavioral responses in fertility will reinforce this decline by reducing the willingness to engage in unprotected sex. We utilize recent rounds of the Demographic and Health Surveys which link an individual woman's fertility outcomes to her HIV status based on testing. The data allows us to distinguish the effect of own positive HIV status on fertility (which may be due to lower fecundity and other physiological reasons) from the behavioral response to higher mortality risk, as measured by the local community HIV prevalence. We show that HIV-infected women have significantly lower fertility. In contrast to Young (2005), however, we find that local community HIV prevalence has no significant effect on non-infected women's fertility.
    JEL: I12 J13 O12
    Date: 2008–08
  17. By: Ian Irvine (Concordia University, Montreal, Canada)
    Abstract: Smokers not only choose the number of cigarettes to smoke in any given period on the basis of price, they also choose the intensity with which to smoke - that is, how much nicotine to inhale. The possibility that quantity-reducing tax policies may be mitigated, or even completely offset, by higher intensity has been raised recently by Adda and Cornaglia (2006). The objective of this paper is to examine this possibility in the context of a utility-maximizing model of smoking that is based on known toxicological patterns. After calibrating this model to re?ect observed behaviors, it is concluded that continuing smokers o¤set about one third of the quantity-reducing impact of higher taxes. Compensatory behavior thus reduces tax e¤ectiveness, but does not render it neutral. While toxicology has long recognized that nicotine inventory management is a key ingredient in smoking behaviour, this paper is the ?rst to incorporate such knowledge into a utility-price based maximizing model.
    Keywords: tobacco, nicotine, cotinine, intensity
    JEL: H21 I12
    Date: 2008–08–06

This nep-hea issue is ©2008 by Yong Yin. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.