nep-hea New Economics Papers
on Health Economics
Issue of 2008‒10‒07
twelve papers chosen by
Yong Yin
SUNY at Buffalo, USA

  1. Inequality in Opportunities in Health in France: A first pass. By Trannoy, A; Tubeuf, S; Jusot, F; Devaux, M
  2. Geographic Equity in Hospital Utilization: Canadian Evidence Using a Concentration-Index Approach By Jeremiah Hurley; Michel Grignon; Li Wang; Tara McGrath
  3. Positive externalities of congestion, human capital, and socio-economic factors: A case study of chronic illness in Japan. By yamamura, eiji
  4. Subjective Health Assessments and Active Labor Market Participation of Older Men: Evidence from a Semiparametric Binary Choice Model with Nonadditive Correlated Individualspecific Effects By Jürgen Maurer; Roger Klein; Francis Vella
  5. Economic Correlates of Suicide Rates in OECD Countries By Thomas Maag
  6. The Interaction between Parents and Children as a Relevant Dimension of Child Well Being. The Case of Italy By Tindara Addabbo; Gisella Facchinetti; Anna Maccagnan; Giovanni Mastroleo; Tommaso Pirotti
  7. The Impact of Piped Water Provision on Infant Mortality in Brazil: A Quantile Panel Data Approach By Shanti Gamper-Rabindran; Shakeeb Khan; Christopher Timmins
  8. A comparison of the health status and health care utilisation patterns between foreigners and the national population in Spain: new evidence from the Spanish National Health Survey By Hernández Quevedo, C; Jiménez Rubio, D
  10. Who has a clue to preventing the flu? Unravelling supply and demand effects on the take-up of influenza vaccinations By Jürgen Maurer
  11. Inequity in Publicly Funded Physician Care: What Is The Role Of Private Prescription Drug Insurance? By Sara Allin; Jeremiah Hurley
  12. Has health capital formation cured ‘Baumol’s Disease’? – Panel Granger causality evidence for OECD countries By Jochen Hartwig

  1. By: Trannoy, A; Tubeuf, S; Jusot, F; Devaux, M
    Abstract: This article analyses the role played by childhood circumstances, especially social and family background in explaining health status among older adults. We also explore the hypothesis of an intergenerational transmission of health inequalities using the French part of SHARE. As the impact of both social background and parents’ health on health status in adulthood represent circumstances independent of individual responsibility, this study allows us to test for the existence in France of inequalities of opportunity in health related to family and social background. Empirically, our study relies both on tests of stochastic dominance at first order and multivariate regressions, supplemented by a counterfactual analysis to evaluate the longlasting impact of childhood conditions on inequality in health. Allocating the best circumstances in both parents’ SES and parents’ health reduces inequality in health by an impressive 57% using the Gini coefficient. The mother’s social status has a direct effect on the health of her offspring. By contrast, the effect on the descendant’s health from the father’s social status is indirect only, going through the descendant’s social status as an adult. There is also a direct effect of each parent’s health on health in adulthood.
    Keywords: Stochastic dominance - equality of opportunity – inequality in health – intergenerational transmission – older adults – Gini index
    Date: 2008–10
  2. By: Jeremiah Hurley (Department of Economics, Centre for Health Economics and Policy Analysis, Department of Clinical Epidemiology and Biostatistics, McMaster University); Michel Grignon (Department of Economics, Centre for Health Economics and Policy Analysis, Department of Health, Aging and Society, McMaster University); Li Wang (Centre for Health Economics and Policy Analysis, Department of Clinical Epidemiology and Biostatistics, McMaster University); Tara McGrath (Accelerated Economics Training Program, Government of Canada)
    Abstract: Distance-related geographic barriers challenge the ability of health systems to allocate health care resources equitably according to need. The paper adapts the concentration-index approach, commonly used for measuring income-related equity, to assess distance-related equity in hospital utilization in the province of Ontario, Canada. The analysis is based on individual-level data from the Canadian Community Health Survey, which provides information on respondents’ hospital utilization, health status, demographic, socio-economic status and location, merged with data on Ontario hospitals, and a geo-coded measure of each respondent’s distance to the nearest general acute-care hospital. We find no evidence of a relationship between distance to the nearest hospital and either the probability of hospitalization or the annual number of hospital nights. Supplementary analyses provide insight into hypothesized pathways between distance and hospitalization. Although having a regular medical doctor is positively associated with distance to the nearest hospital, controlling for this does not affect the estimated distance-hospitalization relationship. Both the size and occupancy rate of the nearest hospital are correlated with distance and are strongly related to the probability of hospitalization, but again controlling for these factors did not affect the estimated relationship between hospital use and distance to the nearest hospital. We do, however, find a strong positive gradient between the probability of hospitalization and distance to the nearest large hospital. This gradient is driven by the fact that, for most of those far from a large hospital, the nearest hospital is small with a low occupancy rate. Calculation of the distance-related horizontal inequity index confirms no distance-related inequity in hospital utilization when distance is measured to the nearest hospital of any size; however, when distance is instead measured to the nearest large hospital, we observe large, pro-distance inequity. These distance-use relationships are not captured by traditional geographic measures based on measures of urbanization/ruralness.
    Keywords: hospital utilization, equity, geography
    Date: 2008
  3. By: yamamura, eiji
    Abstract: This paper explores, using Japanese panel data for the years 1988-2002, how externalities from congestion and human capital influence deaths caused by chronic illnesses. Major findings through fixed effects 2SLS estimation were as follows: (1) the number of deaths were smaller in more densely-populated areas, and this tendency was more distinct for males; (2) higher human capital correlated with a decreased number of deaths, with the effect being greater in females than in males. These findings suggest that human capital and positive externalities stemming from congestion make a contribution to improving lifestyle, which is affected differently by socio-economic circumstance in males and females.
    Keywords: population density; education; chronic illness
    JEL: R58 I19
    Date: 2008–09–29
  4. By: Jürgen Maurer; Roger Klein; Francis Vella (Mannheim Research Institute for the Economics of Aging (MEA))
    Abstract: We use panel data from the US Health and Retirement Study 1992-2002 to estimate the effect of self-assessed health limitations on active labor market participation of men around retirement age. Self-assessments of health and functioning typically introduce an endogeneity bias when studying the effects of health on labor market participation. This results from justification bias, reflecting an individual’s tendency to provide answers which "justify" his labor market activity, and individual-specific heterogeneity in providing subjective evaluations. We address both concerns. We propose a semiparametric binary choice procedure which incorporates potentially nonadditive correlated individual-specific effects. Our estimation strategy identifies and estimates the average partial effects of health and functioning on labor market participation. The results indicate that poor health and functioning play a major role in the labor market exit decisions of older men.
    JEL: I10 J10 J26 C14 C30
    Date: 2008–09–23
  5. By: Thomas Maag (KOF Swiss Economic Institute, ETH Zurich, Switzerland)
    Abstract: This paper investigates how economic conditions are associated with age-sex group specific suicide rates in a panel of 28 OECD countries over the period 1980-2002. We consider the trend and cyclical components of income, unemployment, income inequality, inflation, as well as various socio-demographic control variables. Results depend on whether stationarity properties are adequately accommodated or not. Estimating models in first differences we find that the cyclical component of income is negatively associated with suicide rates of men, while unemployment primarily affects suicide rates of women. Moreover, our estimations show that the effects of the cyclical component of income and unemployment are most pronounced in OECD countries with low public social security spending.
    Keywords: suicide, happiness, welfare, health
    JEL: D60 H51 I10
    Date: 2008–09
  6. By: Tindara Addabbo; Gisella Facchinetti; Anna Maccagnan; Giovanni Mastroleo; Tommaso Pirotti
    Abstract: This paper aims at measuring the functionings of social interaction, a relevant dimension in the description and conceptualisation of child well being by using the capability approach. In this paper we deal with a special dimension of this capability that involves the capability of interaction between parents and child. We propose a fuzzy expert system to measure this capability. To apply the model we use a data set based on a matched data source of ISTAT (Italian National Statistical Office 1998) multipurpose survey on family and on children condition in Italy to recover information on children’s education, the socio-demographic structure of their families, child care provided by relatives and parents according to the type of activities in which the children are involved and Bank of Italy Survey on household income and wealth year 2000 (SHIW00). This is a first step of a more complex system allowing for a richer set of indicators on capabilities in order to measure child well being.
    Keywords: Child Well Being, Fuzzy Expert System, Capabilities
    JEL: C1 C6 D6 D3
    Date: 2008–07
  7. By: Shanti Gamper-Rabindran; Shakeeb Khan; Christopher Timmins
    Abstract: We examine the impact of piped water on the under-1 infant mortality rate (IMR) in Brazil using a novel econometric procedure for the estimation of quantile treatment effects with panel data. The provision of piped water in Brazil is highly correlated with other observable and unobservable determinants of IMR -- the latter leading to an important source of bias. Instruments for piped water provision are not readily available, and fixed effects to control for time invariant correlated unobservables are invalid in the simple quantile regression framework. Using the quantile panel data procedure in Chen and Khan (2007), our estimates indicate that the provision of piped water reduces infant mortality by significantly more at the higher conditional quantiles of the IMR distribution than at the lower conditional quantiles (except for cases of extreme underdevelopment). These results imply that targeting piped water intervention toward areas in the upper quantiles of the conditional IMR distribution, when accompanied by other basic public health inputs, can achieve significantly greater reductions in infant mortality.
    JEL: H41 I18 Q53 Q56 Q58
    Date: 2008–09
  8. By: Hernández Quevedo, C; Jiménez Rubio, D
    Abstract: The reduction of inequalities in health and in the access to health services is one of the main objectives in any health care system. Various studies have analysed the existence of inequalities in health and in the use of health care for the Spanish population. However, the empirical evidence for the immigrant collective on this issue is as yet insufficient. This working paper aims to provide evidence on inequalities in health and in the access to health services for the immigrant population living in Spain, relative to that of the autochthonous population, by using the 2003 and 2006 Spanish National Health Survey. After using a pooled ordered probit for a measure of self-assessed health and pooled probit models for several utilisation variables, our results show that there are different patterns in health status and utilisation of health care between nationals and immigrants in Spain. Immigrants report better levels of health status than Spaniards, although they face barriers of entry to health care services. Health policies should focus on reducing legal, cultural and administrative barriers to access health services.
    Keywords: health care utilisation, health limitations, inequalities, immigrants, Spain
    JEL: I12 C21
    Date: 2008–09
  9. By: Caterina Conigliani
    Abstract: We consider the problem of assessing new and existing technologies for their cost-effectiveness in the case where data on both costs and effects are available from a clinical trial, and we address it by means of the cost-effectiveness acceptability curve. The main difficulty in these analyses is that cost data usually exhibit highly skew and heavy-tailed distributions, so that it can be extremely difficult to produce realistic probabilistic models for the underlying population distribution, and in particular to model accurately the tail of the distribution, which is highly influential in estimating the population mean. Here, in order to integrate the uncertainty about the model into the analysis of cost data and into cost-effectiveness analyses, we consider an approach based on Bayesian model averaging in the particular case of weak prior informations about the unknown parameters of the different models involved in the procedure. The main consequence of this assumption is that the marginal densities required by Bayesian model averaging are undetermined. However in accordance with the theory of partial Bayes factors and in particular of fractional Bayes factors, we suggest replacing each marginal density with a ratio of integrals, that can be efficiently computed via Path Sampling. The results in terms of cost-effectiveness are compared with those obtained with a semi-parametric approach that does not require any assumption about the distribution of costs.
    Keywords: Bayesian model averaging, Cost data, Health economics, MCMC, Non-informative priors,
    JEL: C11 C15
    Date: 2008–07
  10. By: Jürgen Maurer (Mannheim Research Institute for the Economics of Aging (MEA))
    Abstract: Influenza is a serious disease, especially for older people, and incomplete vaccination take-up poses a major public health challenge. On both the side of physicians and patients, there could be promising channels for increasing immunization rates, but no attempt has yet been made to empirically unravel their respective influences. Using exclusion restrictions implied by an economic model of physician-patient interactions, our study quantifies the particular effects of supply and demand on influenza immunization. On the supply side, our estimates highlight the importance of physician agency and physician quality, while a patient’s education and health behaviors are key demand side factors.
    Date: 2008–09–23
  11. By: Sara Allin (LSE Health, London School of Economics and Political Science); Jeremiah Hurley (Department of Economics and Centre for Health Economics and Policy Analysis, McMaster University)
    Abstract: This study examines the impact that private financing of prescription drugs in Canada has on equity in the utilization of publicly financed physician services. The complementary nature of prescription drugs and physician service use alongside the reliance on private finance for drugs may induce an income gradient in the use of physicians. We use established econometric methods based on concentration curves to measure equity in physician utilization and its contributors in the province of Ontario. We find that individuals with prescription drug insurance make more physician visits than do those without insurance, and the effect on utilization is stronger for the likelihood of a visit than the conditional number of visits, and for individuals with no chronic conditions than those with at least one condition. Results of the equity analyses reveal the most important contributors to the pro-rich inequity in physician utilization are income and private insurance, while public insurance, which covers older people and those on social assistance, has a pro-poor effect. These findings highlight that inequity in access to and use of publicly funded services may arise from the interaction with privately financed health services that are complements to the use of public services.
    Keywords: equity, private insurance, prescription drugs, physician utilization
    Date: 2008
  12. By: Jochen Hartwig (KOF Swiss Economic Institute, ETH Zurich, Switzerland)
    Abstract: A large body of both theoretical and empirical literature has affirmed a positive impact of human capital accumulation in the form of health on economic growth. Yet Baumol (1967) has presented a model in which imbalances in productivity growth between a ‘progressive’ (manufacturing) sector and a ‘nonprogressive’ sector of the economy (of which health care forms an integral part) lead to perpetual expenditure shifts into the latter and, as a consequence, to a decline in overall GDP growth. Which of the two views has an empirical grounding is here tested by means of Granger causality analysis of a panel of 21 OECD countries. The results do not lend support to the hypothesis that health capital formation fosters economic growth in rich countries. They are more in line with the predictions of Baumol’s model of unbalanced growth.
    Keywords: Human capital, health expenditure, ‘Baumol’s (Cost) Disease’, panel Granger causality tests
    JEL: C12 C23 I10 O41
    Date: 2008–09

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.