nep-hea New Economics Papers
on Health Economics
Issue of 2009‒03‒14
thirteen papers chosen by
Yong Yin
SUNY at Buffalo, USA

  1. Does Employee Body Weight Affect Employers' Behavior? By Lene Kromann
  2. Re-Constructing Childhood Health Histories By Smith, James P.
  3. Winning big but feeling no better? The effect of lottery prizes on physical and mental health By Bénédicte Apouey; Andrew E. Clark
  4. Health Care Expenditure and Income in the OECD Reconsidered: Evidence from Panel Data By Badi H. Baltagi; Francesco Moscone
  5. Which European model for elderly care? Equity and cost-effectiveness in home based care in three European countries By Francesca Bettio; Giovanni Solinas
  6. Health Systems, Inequality and Incentives to Innovate By Rajat Archaryya; María del Carmen García-Alonso
  7. The Effect of Fast Food Restaurants on Obesity By Currie, Janet; DellaVigna, Stefano; Moretti, Enrico; Pathania, Vikram
  8. The Role of Media in Shaping the Consumers’ Food Risk Perception and Behavior: A Case Study of Spinach Recall By Rimal, Arbindra; Onyango, Benjamin; Miljkovic, Dragan; Hallman, William
  9. The Effect Of Supplemental Insurance On Health Care Demand With Multiple Information: A Latent Class Analysis By Dardanoni, V; Li Donni, P
  10. Health care utilization and immigration in Spain By Muñoz de Bustillo, Rafael; Antón, José-Ignacio
  11. Did Vietnam Veterans Get Sicker in the 1990s? The Complicated Effects of Military Service on Self-Reported Health By Joshua D. Angrist; Stacey H. Chen; Brigham R. Frandsen
  12. Changes in U.S. Hospitalization and Mortality Rates Following Smoking Bans By Kanaka D. Shetty; Thomas DeLeire; Chapin White; Jayanta Bhattacharya
  13. A Bayesian and Classical Econometric Evaluation of the Effect of Cell Phones on Motor Vehicle Fatality Rates By Richard Fowles; Peter Loeb; William A. Clarke

  1. By: Lene Kromann (School of Economics and Management, University of Aarhus, Denmark)
    Abstract: This paper offers a study of possible favoritism of normal-weight individuals when firms make decisions on hiring, firing and promoting. Most existing studies use a wage equation to document dispersion in wages between normal- and overweight, however little is known about the reason for dispersion. Furthermore, the wage equations do not capture the sorting of workers into different occupations and industries. Using an equilibrium search model, this paper takes search friction and cross-firm differences in factor productivity into account, when looking at firm behavior. Addition- ally, a logit model is used to examine the occupation and industry distribution. Most importantly, we find that wage differences between normal-weight and overweight or obese workers are explained by differential firm behavior, both with respect to the job offer arrival rate and to the probability of being promoted. Further, we find that the trade industry hire overweight workers to a lesser extent than other industries.
    Keywords: Overweight, Firm behavior, Equilibrium Search Model, Multinomial Logit
    JEL: I10
    Date: 2009–03–09
  2. By: Smith, James P. (RAND)
    Abstract: This paper provides evidence about the quality of retrospective childhood health histories given to respondents in the HRS and the PSID. Even though information on early life health events is critical, there is legitimate skepticism about the ability of older respondents to remember specific health problems that they had as a child. The evidence presented in this paper suggests that this is too negative a view. Respondents appear to remember salient childhood events about themselves such as the illnesses they had as a child quite well. Moreover, these physical and psychological childhood health events are important correlates of adult health during middle age.
    Keywords: recall, childhood health
    JEL: H0 J0
    Date: 2009–02
  3. By: Bénédicte Apouey; Andrew E. Clark
    Abstract: We use British panel data to explore the exogenous impact of income on a number of individual health outcomes: general health status, mental health, physical health problems, and health behaviours (drinking and smoking). Lottery winnings allow us to make causal statements regarding the effect of income on health, as the amount won is largely exogenous. These positive income shocks have no significant effect on general health, but a large positive effect on mental health. This result seems paradoxical on two levels. First, there is a wellknown status gradient in health in cross-section data, and, second, general health should partly reflect mental health, so that we may expect both variables to move in the same direction. We propose a solution to the first apparent paradox by underlining the endogeneity of income. For the second, we show that exogenous income is associated with greater risky health behaviours: lottery winners smoke more and engage in more social drinking. General health will pick up both mental health and the effect of these behaviours, and so may not improve following a positive income shock. This paper presents the first microeconomic analogue of previous work which has highlighted the negative health consequences of good macroeconomic conditions.
    Date: 2009
  4. By: Badi H. Baltagi; Francesco Moscone
    Abstract: This paper reconsiders the long-run economic relationship between health care expenditure and income using a panel of 20 OECD countries observed over the period 1971-2004. In particular, the paper studies the non-stationarity and cointegration properties between health care spending and income. This is done in a panel data context controlling for both cross-section dependence and unobserved heterogeneity. Cross-section dependence is modelled through a common factor model and through spatial dependence. Heterogeneity is handled through fixed effects in a panel homogeneous model and through a panel heterogeneous model. Our findings suggest that health care is a necessity rather than a luxury, with an elasticity much smaller than that estimated in previous studies.
    Keywords: Health expenditure; income elasticity; cross section dependence; heterogeneous panels; factor models
    JEL: C31 C33 H51
    Date: 2009–02
  5. By: Francesca Bettio; Giovanni Solinas
    Abstract: Long term care for the elderly is growing apace in developed economies. As growth is forcing change in existing production and delivery systems of elderly care services, the question arises as to how different systems compare in terms of cost-effectiveness, equity or quality. Based on an in depth survey carried out in Denmark, Ireland and Italy – the GALCA survey - this articles compares prevailing arrangements of home based long-term care in these three countries, focussing on the overall cost-effectiveness of the provisions as well as on employment equity for the care workers. The first set of comparisons is between alternative types of provisions within each country, and the results suggests that home based care is generally, although not consistently, more cost-effective than care within institutions. The second set of comparisons is between the average provision package in the different countries and suggests that, whereas the Italian and the Danish systems are the most cost effective, the Danish system is more equitable, overall. The results for cost-effectiveness for Italy are partly explained by progressive replacement of unpaid family carers with low cost immigrant workers directly employed by the families and often cohabiting with the elderly (the immigrant-in the family-model). This new model of long term care is spreading across Southern Europe and raises complex issues of equity and sustainability from an employment perspective.
    Keywords: ederly care, cost-effectiveness, migration, welfare
    JEL: I12 I39 J14
    Date: 2009–03
  6. By: Rajat Archaryya; María del Carmen García-Alonso
    Abstract: Governments often subsidize poorer groups in society to ensure their access to new drugs. We analyze here the optimal income-based price subsidies in a strategic environment. We show that asymmetric health systems can arise even though countries are ex-ante symmetric when international price discrimination is possible. Universal access is less likely to arise without price discrimination but also health policy coordination becomes more important. This is due to the multiple equilibria which make the attainment of universal coverage within a given income range ambiguous. We also show that an increase in intra-country inequality does not always lead to less likely universal coverage when international price discrimination is possible.
    Keywords: Health systems; Pharmaceuticals; Innovation; Income based subsidies; Price dicsrimination
    JEL: D4 L1 I1
    Date: 2009–02
  7. By: Currie, Janet; DellaVigna, Stefano; Moretti, Enrico; Pathania, Vikram
    Abstract: We investigate the health consequences of changes in the supply of fast food using the exact geographical location of fast food restaurants. Specifically, we ask how the supply of fast food affects the obesity rates of 3 million school children and the weight gain of over 1 million pregnant women. We find that among 9th grade children, a fast food restaurant within a tenth of a mile of a school is associated with at least a 5.2 percent increase in obesity rates. There is no discernable effect at .25 miles and at .5 miles. Among pregnant women, models with mother fixed effects indicate that a fast food restaurant within a half mile of her residence results in a 2.5 percent increase in the probability of gaining over 20 kilos. The effect is larger, but less precisely estimated at .1 miles. In contrast, the presence of non-fast food restaurants is uncorrelated with obesity and weight gain. Moreover, proximity to future fast food restaurants is uncorrelated with current obesity and weight gain, conditional on current proximity to fast food. The implied effects of fast-food on caloric intake are at least one order of magnitude smaller for mothers, which suggests that they are less constrained by travel costs than school children. Our results imply that policies restricting access to fast food near schools could have significant effects on obesity among school children, but similar policies restricting the availability of fast food in residential areas are unlikely to have large effects on adults.
    Keywords: Food Consumption/Nutrition/Food Safety, Health Economics and Policy,
    Date: 2009–02
  8. By: Rimal, Arbindra; Onyango, Benjamin; Miljkovic, Dragan; Hallman, William
    Abstract: A clear understanding of consumers’ perception and attitude toward food risk and their behavior to food recall is important in order to develop an effective crisis management program at the firm level as well as at the government level. This study will develop food risk profiles of US consumers based on their perceived food safety risk and attitude toward food safety. The role of media usage in shaping the risk profile will be examined. The preliminary results suggest that the risk profiles of households were shaped by media usage. While the “accountables†were more likely to search internet or get news from internet, the “conservatives†usually watched news on local TV.
    Keywords: Agribusiness, Food Consumption/Nutrition/Food Safety,
    Date: 2008–12–21
  9. By: Dardanoni, V; Li Donni, P
    Abstract: The Medicare program, which provides insurance coverage to the elderly in the United States, does not protect them fully against high out-of-pocket costs. For this reason private supplementary insurance, named Medigap, has been available to cover Medicare gaps. This paper studies how Medigap affects the utilization of health care services. The decision to take out supplemental insurance is likely to be infuenced by unobservable attributes such as actual risk type and insurance preferences. Empirical appraisals to this problem typically rely on the recursive bivariate probit. We exploit the Health and Retirement Study data and some recent advances on latent class analysis to jointly model the insurance and health care decisions. Results show the presence of unobserved `types' representing different preferences and risk levels. We compare our results to those obtained by the probit and the bivariate probit and find the residual effect of insurance on health care not significant.
    Keywords: Health Care Demand; Latent Class Models; Health Insurance; Asymmetric Information; Medigap.
    JEL: C52 D82 G22 I10
    Date: 2009–03
  10. By: Muñoz de Bustillo, Rafael; Antón, José-Ignacio
    Abstract: The aim of this work is to analyze the use of health care services by immigrants in Spain. Using a nationally representative health survey from 2006-2007 that allows overcoming problems present in previous studies and negative binomial and hurdle models, it is found that there is no statistically significant difference in the patterns of visits to physicians and hospital stays between migrants and natives in Spain. However, immigrants have a lower access to specialists and visit emergency rooms with higher frequency than nationals.
    Keywords: health care; immigration; Spain; access; equity.
    JEL: F22 I10
    Date: 2009–03–01
  11. By: Joshua D. Angrist; Stacey H. Chen; Brigham R. Frandsen
    Abstract: The veterans disability compensation (VDC) program, which provides a monthly stipend to disabled veterans, is the third largest American disability insurance program. Since the late 1990s, VDC growth has been driven primarily by an increase in claims from Vietnam veterans, raising concerns about costs as well as health. We use the draft lottery to study the long-term effects of Vietnam-era military service on health and work in the 2000 Census. These estimates show no significant overall effects on employment or work-related disability status, with a small effect on non-work-related disability for whites. On the other hand, estimates for white men with low earnings potential show a large negative impact on employment and a marked increase in non-work-related disability rates. The differential impact of Vietnam-era service on low-skill men cannot be explained by more combat or war-theatre exposure for the least educated, leaving the relative attractiveness of VDC for less skilled men and the work disincentives embedded in the VDC system as a likely explanation.
    JEL: H55 H59 I12 I38 J22
    Date: 2009–03
  12. By: Kanaka D. Shetty; Thomas DeLeire; Chapin White; Jayanta Bhattacharya
    Abstract: U.S. state and local governments are increasingly restricting smoking in public places. This paper analyzes nationally representative databases, including the Nationwide Inpatient Sample, to compare short-term changes in mortality and hospitalization rates in smoking-restricted regions with control regions. In contrast with smaller regional studies, we find that workplace bans are not associated with statistically significant short-term declines in mortality or hospital admissions for myocardial infarction or other diseases. An analysis simulating smaller studies using subsamples reveals that large short-term increases in myocardial infarction incidence following a workplace ban are as common as the large decreases reported in the published literature.
    JEL: I1 I18
    Date: 2009–03
  13. By: Richard Fowles; Peter Loeb; William A. Clarke
    Abstract: This paper examines the potential effect of cell phones on motor vehicle fatality rates normalized for other driving related and socioeconomic factors. The model used is nonlinear so as to address both life-taking and life-saving attributes of cell phones. The models are evaluated using classical methods along with Bayesian Extreme Bounds Analysis (EBA). The use of both classical and Bayesian methods diminishes the model and parameter uncertainties which afflict more conventional modeling methods which rely on only one of the two methods. The results indicate the presence of both life-taking and life-saving attributes of cell phones on motor vehicle fatality rates depending on the volume of cell phone subscribers in existence.
    Keywords: Motor Vehicle Fatality Rates, Cell Phones, Bayesian Econometric Methods, Extreme Bounds Analysis, Classical Econometric Methods
    JEL: L92
    Date: 2009–02

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