nep-hea New Economics Papers
on Health Economics
Issue of 2008‒12‒21
three papers chosen by
Yong Yin
SUNY at Buffalo, USA

  1. On the Sorting of Physicians across Medical Occupations By Courty, Pascal; Marschke, Gerald
  2. Pharmaceutical Industry, Drug Quality and Regulation: Evidence from US and Italy By Vincenzo Atella; Jay Bhattacharya; Lorenzo Carbonari
  3. Season of Birth and Later Outcomes: Old Questions, New Answers By Kasey Buckles; Daniel M. Hungerman

  1. By: Courty, Pascal (European University Institute); Marschke, Gerald (Harvard University)
    Abstract: We model the sorting of medical students across medical occupations and identify a mechanism that explains the possibility of differential productivity across occupations. The model combines moral hazard and matching of physicians and occupations with pre-matching investments. In equilibrium assortative matching takes place; more able physicians join occupations less exposed to moral hazard risk, face more powerful performance incentives, and are more productive. Under-consumption of health services relative to the first best allocation increases with occupational (moral hazard) risk. Occupations with risk above a given threshold are not viable. The model offers an explanation for the persistence of distortions in the mix of health care services offered, the differential impact of malpractice risk across occupations, and the recent growth in medical specialization.
    Keywords: performance measurement, moral hazard, incentives, matching, pre-matching investment, career choice, medical specialization
    JEL: D82 I10 J31 J33 L23
    Date: 2008–12
  2. By: Vincenzo Atella; Jay Bhattacharya; Lorenzo Carbonari
    Abstract: The aim of this article is to analyze the relationship between drug price and drug quality and how it varies across two of the most common regulatory regimes in the pharmaceutical market: Minimum Efficacy Standards (MES) and Price Controls (PC). We develop a model of adverse selection where a pharmaceutical company can charge different prices to a heterogeneous group of buyers for its (innovative) drug, and we evaluate the properties of the equilibria under the two regimes. We model consumer heterogeneity stemming from differences in the willingness-to-pay for drug quality, measured through ex-post efficacy. The theoretical analysis provides two main results. First, the average drug quality delivered is higher under the MES regime than in the PC regime or a in combination of the two. Second, PC regulation reduces the difference in terms of high-low quality drug prices. The empirical analysis based on Italian and US data corroborates these results.
    JEL: I1 L51 L65
    Date: 2008–12
  3. By: Kasey Buckles; Daniel M. Hungerman
    Abstract: Research has found that season of birth is associated with later health and professional outcomes; what drives this association remains unclear. In this paper we consider a new explanation: that children born at different times in the year are conceived by women with different socioeconomic characteristics. We document large seasonal changes in the characteristics of women giving birth throughout the year in the United States. Children born in the winter are disproportionally born to women who are more likely to be teenagers and less likely to be married or have a high school degree. We show that controls for family background characteristics can explain up to half of the relationship between season of birth and adult outcomes. We then discuss the implications of this result for using season of birth as an instrumental variable; our findings suggest that, though popular, season-of-birth instruments may produce inconsistent estimates. Finally, we find that some of the seasonality in maternal characteristics is due to summer weather differentially affecting fertility patterns across socioeconomic groups.
    JEL: C10 J11 J13
    Date: 2008–12

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