nep-hea New Economics Papers
on Health Economics
Issue of 2008‒11‒18
eighteen papers chosen by
Yong Yin
SUNY at Buffalo, USA

  1. Globalization and Health: Impact Pathways and Recent Evidence By Cornia, Giovanni Andrea; Rosignoli, Stefano; Tiberti, Luca
  2. Child Health and Young Adult Outcomes By Janet Currie; Mark Stabile; Phongsack Manivong; Leslie L. Roos
  3. Early retirement and inequality in Britain and Germany: How important is health? By Roberts, J; Rice, N; Jones, A.M
  4. New Evidence on Overweight Children in Urban China and the Role of Socioeconomic Factors By Dong, Fengxia; Jensen, Helen H.
  5. Financial incentives for return of service in underserved areas: a systematic review By Till Bärnighausen; David E. Bloom
  6. Designing financial-incentive programmes for return of medical service in underserved areas of sub-Saharan Africa By Till Bärnighausen; David E. Bloom
  7. Medicine and Economics: Accounting for the full benefits of childhood vaccination in South Africa By Till Bärnighausen; David E. Bloom; Salal Humair; Jennifer O'Brien
  8. Health and Wages - Panel data estimates considering selection and endogeneity By Jäckle, Robert; Himmler, Oliver
  9. Economic, Environmental, and Endowment Effects on Childhood Obesity By Wendt, Minh
  10. Disease Outbreaks and Agricultural Trade: The Case of Potatoes By Clark, J. Stephen; Thibodeau, David R.; Grant, K. Gary; Prochazkova, Katerina
  11. Socioeconomic Status, Neighborhood, Household Behavior, and Children's Health in the United States: Evidence from Children's Health Survey Data By Aradhyula, Satheesh; Rahman, Tauhidur
  12. Food insecurity and childhood obesity: beyond categorical and linear representations By Kuku, Yemisi; Gundersen, Craig; Garasky, Steven
  13. Food Safety Incidents, Collateral Damage and Trade Policy Responses: China-Canada Agri-Food Trade By Liu, Huanan; Hobbs, Jill E.; Kerr, William A.
  14. The rise of obesity in transition economies: theory and evidence from Russian longitudinal monitoring survey By Huffman, Sonya; Rizov, Marian
  15. The Economic and Demographic Transition, Mortality, and Comparative Development By Matteo Cervellati; Uwe Sunde
  16. Health and Environmental Benefits of Reduced Pesticide Use in Uganda: An Experimental Economics Analysis By Bonabana-Wabbi, Jackline; Taylor, Daniel B.
  17. Estimating health worker need to provide antiretroviral treatment in the developing world By Till Bärnighausen; David E. Bloom; Salal Humair
  18. Measurement and Explanation of Inequality in Health and Health Care in Low-Income Settings By van Doorslaer, Eddy; O'Donnell, Owen

  1. By: Cornia, Giovanni Andrea; Rosignoli, Stefano; Tiberti, Luca
    Abstract: The last two decades of the twentieth century recorded a slowdown in health gains and widespread increases in health inequality across and within countries. The paper explores the causes of such trends on the basis of five main mortality models. To do so, it regresses IMR/LEB on 15 determinants of health. The results underscore the negative health effects of the trends observed between 1980-2000, such as rising inequality, greater income volatility, declining health expenditure, increasing migration and so on. Finally, the paper simulates the level of LEB that would have been achieved in ten regions of the world if the determinants of health had continued developing over these decades as they did over 1960-80. The results indicate that in seven of such regions (including China and India) LEB would have been higher than actually observed. In this regard, the paper raises doubts about the way globalization has taken place and the way public policy oriented it.
    Keywords: health status, health inequalities, globalization
    Date: 2008
  2. By: Janet Currie; Mark Stabile; Phongsack Manivong; Leslie L. Roos
    Abstract: Previous research has shown a strong connection between birth weight and future child outcomes. But this research has not asked how insults to child health after birth affect long-term outcomes, whether health at birth matters primarily because it predicts future health or through some other mechanism, or whether health insults matter more at some key ages than at others? We address these questions using a unique data set based on public health insurance records for 50,000 children born between 1979 and 1987 in the Canadian province of Manitoba. These children are followed until 2006, and their records are linked to provincial registries with outcomes data. We compare children with health conditions to their own siblings born an average of 3 years apart, and control for health at birth. We find that health problems, and especially mental health problems in early childhood are significant determinants of outcomes linked to adult socioeconomic status.
    JEL: I1
    Date: 2008–11
  3. By: Roberts, J; Rice, N; Jones, A.M
    Abstract: Both health and income inequalities have been shown to be much greater in Britain than in Germany. One of the main reasons seems to be the difference in the relative position of the retired, who, in Britain, are much more concentrated in the lower income groups. Inequality analysis reveals that while the distribution of health shocks is more concentrated among those on low incomes in Britain, early retirement is more concentrated among those on high incomes. In contrast, in Germany, both health shocks and early retirement are more concentrated among those with low incomes. We use comparable longitudinal data sets from Britain and Germany to estimate hazard models of the effect of health on early retirement. The hazard models show that health is a key determinant of the retirement hazard for both men and women in Britain and Germany. The size of the health effect appears large compared to the other variables. Designing financial incentives to encourage people to work for longer may not be sufficient as a policy tool if people are leaving the labour market involuntarily due to health problems.
    Keywords: health, early retirement, hazard models.
    JEL: J26 I10 C23 C41
    Date: 2008–11
  4. By: Dong, Fengxia; Jensen, Helen H.
    Abstract: Problems of overweight and obesity among children have increased in China and pose a problem both for individuals as well as for public social and health care systems. This study explores factors contributing to weight problems among children age 6 to 18 years old in urban China. Data come from the 2004 China Health and Nutrition Survey. Results from a binary probit model show that parents' being overweight, some patterns of TV use, and more frequent eating in fast food restaurants influence children being overweight. Among younger children, parent's dietary knowledge was a significant factor. For adolescents, TV habits and concern about being liked by friends were significant. The results suggest that targeted nutrition education, especially for parents and adolescents, and control of TV ads are policies that may have an effect on reducing children's overweight.
    Keywords: China, children's nutrition, health, nutrition, obesity, Consumer/Household Economics, Food Consumption/Nutrition/Food Safety, Health Economics and Policy,
    Date: 2008
  5. By: Till Bärnighausen (Africa Centre for Health and Population Studies, University of KwaZulu-Natal); David E. Bloom
    Abstract: In many geographical regions, both in developing and in developed countries, the number of health workers is insufficient to achieve population health goals. Financial incentives for return of service are intended to alleviate health worker shortages: A (future) health worker enters into a contract to work for a number of years in an underserved area in exchange for a financial pay-off. The authors of this paper carried out a systematic literature search of PubMed for studies evaluating outcomes of financial-incentive programs published between 1957 and 2007.
    Keywords: Disease, control, global health, financial-incentive programs.
    Date: 2008–10
  6. By: Till Bärnighausen (Africa Centre for Health and Population Studies, University of KwaZulu-Natal); David E. Bloom (Harvard School of Public Health)
    Abstract: In many countries in sub-Saharan Africa health worker shortages are one of the main constraints in achieving population health goals. Financial-incentive programmes for return of service, whereby participants receive payments in return for a commitment to practice for a period of time in a medically underserved area, can alleviate local and regional health worker shortages through two mechanisms. First, they can redirect the flow of those health workers who would have been educated without financial incentive from well-served to underserved areas. Second, they can add health workers to the pool of workers who would have been educated without financial incentives and place them in underserved areas. While financial-incentive programmes are an attractive option to increase the supply of health workers to medically underserved areas – they offer students who otherwise would not have the means to finance a health care education an opportunity to do so, establish legally enforceable commitments to work in underserved areas, and work without compulsion – these programmes may be difficult to implement.
    Keywords: Disease, control, global health, financial-incentive programs, Africa.
    Date: 2008–10
  7. By: Till Bärnighausen (Africa Centre for Health and Population Studies, University of KwaZulu-Natal); David E. Bloom (Harvard School of Public Health); Salal Humair (School of Science and Engineering, Lahore University of Management Sciences, Pakistan); Jennifer O'Brien (Harvard School of Public Health)
    Abstract: While remarkable gains in health have been achieved since the mid-20th century, these have been unequally distributed, and mortality and morbidity burdens in some regions remain enormous. Of the almost 10 million children under 5 years of age who died in 2006, only 100 000 died in industrialised countries, while 4.8 million died in sub-Saharan Africa.1 In deciding whether to finance an intervention, policy makers commonly weigh the expected population health gains against its costs. Most vaccinations included in national immunisation schedules are inexpensive2 and health gains to costs are very favourable compared with other health interventions. Newer vaccinations, such as those with pneumococcal conjugate vaccine (PCV) or rotavirus vaccine, are also effective in averting child mortality and morbidity but are expensive relative to those commonly included in national immunisation schedules. Policy makers may therefore decide that – at current prices – the comparison of health gains with costs does not justify the free public provision of these vaccinations. The authors of this paper argue that in addition to the health benefits of vaccinations, their effects on education and income3 and benefits for unvaccinated community members are considerable and should be included in calculations to establish their value.
    Keywords: Disease, control, global health, vaccination, HIV/AIDS, Africa.
    Date: 2008–10
  8. By: Jäckle, Robert; Himmler, Oliver
    Abstract: This paper complements previous studies on the effects of health on wages by addressing the problems of unobserved heterogeneity, sample selection, and endogeneity in one comprehensive framework. Using data from the German Socio-Economic Panel (GSOEP) we find the health variable to suffer from measurement error and a number of tests provide evidence that selection corrections are necessary. Good health leads to higher wages for men, while there appears to be no significant effect for women. Contingent on the method of estimation, healthy males are estimated to earn between 1.3% and 7.8% more than those in poor health.
    Keywords: health; wages; fixed effects; sample selection; instrumental variables
    JEL: C34 J4 C33 I1
    Date: 2007–02
  9. By: Wendt, Minh
    Abstract: Replaced with revised version of paper 08/01/08.
    Keywords: Food Consumption/Nutrition/Food Safety, Health Economics and Policy,
    Date: 2008
  10. By: Clark, J. Stephen; Thibodeau, David R.; Grant, K. Gary; Prochazkova, Katerina
    Abstract: This study analyzed the impact of PVYn and potato wart disease outbreaks in PEI on the potato industry. These disease outbreaks resulted in the loss of the US seed export market to PEI producers. The effects of the disease outbreaks were mitigated through value-added processing. Price premiums for processed potatoes allowed PEI potato producers to abandon seed exports without incurring losses. Evidence is presented to suggest that other countries have also used this approach when export restrictions were placed on domestic agricultural industries. Policy response to the two disease outbreaks include: i) development of a zones policy that helped to reopen markets into the US; and ii) financial compensation to producers above the minimum levels required under the Seeds Act and Regulations. Implementation of the zones policy had beneficial impacts on the potato industry and is mirrored in other disease outbreaks. In contrast, compensation above minimum requirements may set a costly precedent for future disease outbreaks and may have caused moral hazard problems.
    Keywords: disease, trade, potatoes, Canada, food, safety, Agricultural and Food Policy, International Development, International Relations/Trade,
    Date: 2008–07
  11. By: Aradhyula, Satheesh; Rahman, Tauhidur
    Abstract: Using insights from economics, pediatrics, psychology, and sociology, this paper examines the effects of income, income inequality, neighborhood characteristics, maternal health, the participation in religious services, breastfeeding, household smoking, and racial/ethnic composition of population on child health. Using aggregate data on children's health and well-being for 50 U.S. states derived from the National Survey of Children's Health (NSCH, 2005), we document the following results: (1) the independent effects of income inequality on children's health vary across domains of child health outcomes, as some aspects of child health (mental health) are more responsive to the immediate environment of family and neighborhood than others; (2) neighborhood characteristics are powerful predictors of children's health; (3) there is a large effect of maternal health on children's health; (4) children who participate in religious services at least once a week have less socio-emotional difficulties compared to children who do not, and (5) breastfeeding has beneficial effect on children's health, while household smoking has negative effect on children's health and well-being.
    Keywords: Consumer/Household Economics, Health Economics and Policy,
    Date: 2008
  12. By: Kuku, Yemisi; Gundersen, Craig; Garasky, Steven
    Abstract: Previous work on the relationship between food insecurity and childhood overweight has lead to a wide array of answers €Ӡsome have found a positive relationship, others no relationship, and still others a negative relationship. This previous work has shared one thing in common €Ӡall have used parametric models. In this paper we move beyond parametric models by using non-parametric models. With data from the 1999-2002 National Health and Nutrition Examination Survey (NHANES) and a wide array parametric methods, we find evidence across different samples of a positive relationship, no relationship, and a negative relationship between childhood overweight and food insecurity. When we turn to non-parametric methods, however, this ambiguity across samples is not as prevalent. Instead, across different samples, we find (a) increases in the probability of food insecurity in the middle of the BMI distribution, (b) increases in the probability at the very high end of the BMI, and (c) no relationship across the entire distribution. We present some parametric models that roughly mimic these relationships. Our results indicate that efforts to reduce food insecurity will either have no impact on childhood overweight or would lead to reductions in childhood overweight.
    Keywords: Food Consumption/Nutrition/Food Safety, Food Security and Poverty,
    Date: 2008
  13. By: Liu, Huanan; Hobbs, Jill E.; Kerr, William A.
    Abstract: As markets become globalized, food safety policy and international trade policy are increasingly intertwined. Globalization also means that food safety incidents are widely reported internationally. One result is that food safety incidents can negatively impact products where no food safety issue exists as consumers lose trust in both foreign and domestic food safety institutions. While the policy framework for dealing with directly effected imported foods is well understood, how to deal with the market failure associated with indirectly affected products within the existing trade policy rules has not been explored. Using the example of China€ٳ 2007 problems with a spate of products safety incidents, a theoretical framework is developed and the response of both the Chinese and Canadian governments analyzed. A cooperative approach to the issues appears to have a number of advantages and does not contravene trade policy commitments.
    Keywords: Canada, China, cooperation, food safety, market failure, trade policy, Agricultural and Food Policy, International Development, International Relations/Trade,
    Date: 2008–04
  14. By: Huffman, Sonya; Rizov, Marian
    Abstract: This study integrates theoretical and empirical models to facilitate understanding of human obesity and the factors contributing to rising obesity in Russia during the transition from a planned to a market economy. Recent individual level data from the Russian Longitudinal Monitoring Survey for 1994 and 2004 show that diet/caloric intake, smoking, gender and education are important determinants of obesity in Russia. Empirical results strongly support our model for production of BMI and demand for inputs in the BMI production function. The analysis provides information on the link between dietary patterns and other factors of obesity in Russia which is important for formulation, implementation and monitoring of effective policies designed to improve overall nutritional wellbeing and reduce obesity and mortality of the Russian population. Interventions, which enhance education toward healthy lifestyles and healthy diet, could play a vital role in preventing obesity in Russia.
    Keywords: Food Consumption/Nutrition/Food Safety,
    Date: 2008
  15. By: Matteo Cervellati; Uwe Sunde
    Abstract: We present a theory of the economic and demographic transition where adult longevity, child mortality, fertility and the education composition of the population are jointly determined. The model allows for an investigation of the determinants of underdevelopment traps as well as of the mechanism that leads to an endogenous exit out of the trap. We also study the different roles of exogenous reductions in mortality and of permanent differences in extrinsic mortality for comparative development. The theory delivers a series of novel predictions which are illustrated with a simple dynamic simulation of the model. These predictions are shown to be consistent with evidence using both time series data and crosscountry panel data.
    Keywords: Economic and Demographic Transition, Adult Longevity, Child Mortality, Heterogeneous Human Capital, Comparative Development, Development Traps, Kernel Distributions
    JEL: E10 J10 J13 N30 O10 O40
    Date: 2008–11
  16. By: Bonabana-Wabbi, Jackline; Taylor, Daniel B.
    Abstract: Two experimental procedures were employed to value both health and environmental benefits from reducing pesticide use in Uganda. The first experiment, an incentive compatible auction involved subjects with incomplete information placing bids to avoid consuming potentially contaminated groundnuts/water in a framed field experimental procedure. Three experimental treatments (information, proxy good, and group treatments) were used. Subjects were endowed with a monetary amount (starting capital) equivalent to half the country€ٳ per capita daily income (in small denominations). Two hundred and fifty seven respondents were involved in a total of 35 experimental sessions in Kampala and Iganga districts. The Kampala sample consisted of urban (professional) residents while the Iganga sample consisted of rural (groundnut farmer) residents. Analyses with Tobit models indicated that subjects are willing to pay significant amounts to avoid ill health outcomes, although these values vary by region, by treatment and by socio-economic characteristics. Gender differences were important in explaining bid behavior, with male respondents in both study areas bidding higher to avoid ill health outcomes than females. Consistent with a priori expectation, rural population€ٳ average willingness to pay to avoid ill health outcomes was lower (by 11.4 percent) than the urban population€ٳ willingness to pay perhaps reflecting the poverty level/low incomes in the rural areas and how it translates into reduced regard for health and environmental improvements. Salaried respondents in Kampala were willing to pay more than those on hourly wages. Tests of hypotheses suggested: (i) providing brief information to subjects just prior to the valuation exercise does not influence bid behavior, (ii) subjects are indifferent to the source of contamination: willingness to pay to avoid health outcomes from potentially contaminated water versus groundnuts are not significantly different, and (iii) the classical tendency to free-ride in public goods provision was observed in both urban and rural areas, and this phenomenon was more pronounced in the urban than the rural area. The second experimental procedure, choice experiments, involved 132 urban respondents making repeated choices from a set of scenarios described by attributes of water quality, an environmental good. Water quality was represented by profiles of water safety levels at varying costs. Analysis using a conditional (fixed effects) logit model showed that urban subjects highly discount unsafe drinking water, and were willing to pay less for safe agricultural water, a result not unexpected considering that the urban population is not directly involved in agricultural activities and thus may not value agricultural water quality as much as drinking water quality. It was also found that subjects€٠utility increased with the cost of a water sample (inconsistent with a downward sloping demand curve), suggesting perhaps that they perceived higher cost water to be associated with higher quality water. Advertisements for bottled water in Uganda would have consumers believe that higher cost bottled water is higher quality.
    Keywords: Experimental auctions, Choice experiments, Crop Production/Industries, Environmental Economics and Policy, Health Economics and Policy,
    Date: 2008
  17. By: Till Bärnighausen (Africa Centre for Health and Population Studies, University of KwaZulu-Natal); David E. Bloom (Harvard School of Public Health); Salal Humair (School of Science and Engineering, Lahore University of Management Sciences, Pakistan)
    Abstract: Despite recent international efforts to increase antiretroviral treatment (ART) coverage, more than 5 million people who need ART in developing countries do not receive such treatment. Shortages of human resources to treat HIV/AIDS (referred to herein as HRHA) are one of the main constraints to further scaling up ART. Planning expansion of ART depends on the ability to predict how many HRHA will be needed in the future. We investigate whether taking into account positive feedback from the current supply of HRHA to future HRHA need substantially alters predictions. This feedback occurs because an increase in the number of HRHA implies an increase in the number of individuals receiving ART and – because ART is a lifelong treatment and is effective in prolonging the lives of HIV-positive people – a rise over time in the number of people requiring ART.
    Keywords: Disease, control, global health, HIV/AIDS, Africa.
    Date: 2008–10
  18. By: van Doorslaer, Eddy; O'Donnell, Owen
    Abstract: This paper describes approaches -Date the measurement and explanation of income-related inequality and inequity in health care financing, health care utilization and health and considers the applicability and the feasibility of these methods in low-income countries. Results Date a comparative study of 14 Asian countries are used -Date illustrate the main issues. The structure of health finance in low-income countries, in particular the heavy reliance on out-of-pocket payments, means that the equity issues in finance are quite different Date those of concern in high-income countries. Primary concern is not with the distribution of contributions -Date pre-payment mechanisms but with the deterrent effect of payments on utilization and the distribution of uninsured payment risks. Measurement of inequity in utilization of health care in low-income countries is constrained by the lack of reliable measures of health that can be used -Date standardize for need. Nonetheless, sufficient is known of the distribution of need in many circumstances in order -Date make inferences about equity Date inequality in health care use. The empirical analyses demonstrate that, in low-income countries, the better-off tend -Date pay more for health care, both absolutely and in relative terms. But they also consume more health care. Health care is financed is largely according -Date the benefit principle. Assessing the distributional performance of health systems in low-income settings therefore requires examination of finance and utilization simultaneously.
    Keywords: health inequality, equity
    Date: 2008

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.