nep-hea New Economics Papers
on Health Economics
Issue of 2009‒11‒07
twelve papers chosen by
Yong Yin
SUNY at Buffalo, USA

  1. The Value of Statistical Life: Pursuing the Deadliest Catch By Kurt E. Schnier; William C. Horrace; Ronald G. Felthoven
  2. Policy Relevant Heterogeneity in the Value of Statistical Life: New Evidence from Panel Data Quantile Regressions By Thomas J. Kniesner; W. Kip Viscusi; James P. Ziliak
  3. Health Inequality and Its Determinants in New York By Kajal Lahiri; Zulkarnain Pulungan
  4. More Tickets, Fewer Accidents: How Cash-Strapped Towns Make for Safer Roads By Michael D. Makowsky; Thomas Stratmann
  5. Is Posner Right? An Empirical Test of the Posner Argument for Transferring Health Spending from Old Women to Old Men By Wunder, Christoph; Schwarze, Johannes
  6. HIV and Fertility in Africa: First Evidence from Population Based Surveys By Juhn, Chinhui; Kalemli-Ozcan, Sebnem; Turan, Belgi
  7. Health Investment over the Life-Cycle By Halliday, Timothy; He, Hui; Zhang, Hao
  8. Gradients of the Intergenerational Transmission of Health in Developing Countries By Sonia Bhalotra; Samantha Rawlings
  9. Are Drinkers Prone To Engage In Risky Sexual Behaviors? By Gil Lacruz, Ana Isabel; Gil Lacruz, Marta; Oliva Moreno, Juan
  10. An economic framework for analysing the social determinants of health and health inequalities By David Epstein; Dolores Jimenez-Rubio; Peter C Smith; Marc Suhrcke
  11. Does Education Shield Against Common Mental Disorders? By Edvard Johansson; Petri Böckerman; Tuija Martelin; Sami Pirkola; Karí Poikolainen
  12. Chronic Health Conditions: Changing Prevalence in an Aging Population and Some Implications for the Delivery of Health Care Services By Frank T. Denton; Byron G. Spencer

  1. By: Kurt E. Schnier (Department of Economics, Andrew Young School of Policy Studies, Georgia State University, P.O. Box 3992, Atlanta GA 30302-3992); William C. Horrace (Department of Economics and Center for Policy Research, Maxwell School, Syracuse University, 426 Eggers Hall, Syracuse, NY 13244-1020); Ronald G. Felthoven (U.S. National Marine Fisheries Service, Alaska Fisheries Science Center)
    Abstract: Observed tradeoffs between monetary returns and fatality risk identify estimates of the value of a statistical life (VSL), inform public policy and quantity preferences for environmental quality, health and safety. To date, few investigations have estimated the VSL associated with tradeoffs between returns from natural resource extraction activities and the fatality risks they involve. Furthermore researchers have been unable to determine whether or not one's VSL is stable across multiple decision environments using revealed preference methods. Understanding these tradeoffs (and the VSL that they imply) may be used to inform resource management policy and safety regulations, as well as our general understanding of the value of life. By modeling a commercial fishing captain's choice to fish or not, conditional on the observed risk, this research investigates these toics using data from the Alaskan red king crab and snow crab fisheries. Using weather conditions and policy variables as instruments, our estimates of the mean VSL range from $4.00 to $4.67M (depending on the modeling assumption and fishery analyzed) and are robust to the incorporation of heterogeneous preferences. Furthermore, given the unique nature of the data we are able to conduct an intra-vessel comparison of the VSL and conclude that for roughly 92% of the fishermen observed in the data seet their VSL estimates are stable across both fisheries.
    Keywords: value of statistical life (VSL); intra-agent VSL comparison; Alaskan crab fisheries
    JEL: J28 Q22
    Date: 2009–10
  2. By: Thomas J. Kniesner (Krisher Professor of Economics and Senior Research Associate, Center for Policy Research, Maxwell School, Syracuse University, 426 Eggers Hall, Syracuse, NY 13244-1020); W. Kip Viscusi (University Distinguished Professor of Law, Economics, and Management, Vanderbilt University, Nashville, TN); James P. Ziliak (Carol Martin Gatton Chair in Microeconomics; Director, Center for Poverty Research, University of Kentucky, Lexington, KY)
    Abstract: We examine differences in the value of statistical life (VSL) across potential wage levels in panel data using quantile regressions with intercept heterogeneity. Latent heterogeneity is econometrically important and affects the estimated VSL. Our findings indicate that a reasonable average cost per expected life saved cut-off for health and safety regulations is $7 million to $8 million per life saved, but the VSL varies considerably cross the labor force. Our results reconcile the previous discrepancies betweenhedonic VSL estimates and the values implied by theories linked to the coefficient of relative risk aversion. Because the VSL varies elastically with income, regulatory agencies should regularly update the VSL used in benefit assessments, increasing the VSL proportionally with changes in income over time.
    Keywords: value of statistical life, VSL, quantile regression, panel data, fixed effects, PSID, fatality risk, CFOI
    JEL: C23 I10 J17 J28 K00
    Date: 2009–10
  3. By: Kajal Lahiri; Zulkarnain Pulungan
    Abstract: Self-assessed health status conditioned by several objective measures of health and socio-demographic characteristics are used to measure health inequality. We compare the quality of health and health inequality among different racial/ethnic groups as well as across 17 regions in New York State. In terms of average health and health inequality, American Indian/Alaskan Natives and Hispanics are found to be the worst, and North Country, Bronx County, and Richmond County lag behind the rest of the State. Three major contributing factors to health inequality are found to be employment status, education, and income. However, the contribution of each of these determinants varies significantly among racial/ethnic groups as well as across regions, suggesting targeted public health initiatives for vulnerable populations to eliminate overall health disparity.
    Date: 2009
  4. By: Michael D. Makowsky (Department of Economics, Towson University); Thomas Stratmann (Department of Economics, George Mason University)
    Abstract: Traffic accidents are one of the leading causes of injury and death in the U.S. The role of traffic law enforcement in the reduction of accidents has been studied by relatively few papers and with mixed results that may be due to a simultaneity problem. Traffic law enforcement may reduce accidents, but police are also likely to be stricter in accident- prone areas. We use municipal budgetary shortfalls as an instrumental variable to identify the effect of traffic citations on traffic safety and show that budgetary shortfalls lead to more frequent issuance of tickets to drivers. Using a panel of municipalities in Massachusetts, we show that increases in the number of tickets written reduce motor vehicle accidents and accident related injuries. The findings show that failure to control for endogeneity results in a significant underestimation of the positive impact of law enforcement on traffic safety.
    Keywords: traffic accidents, safety, law enforcement, simultaneity.
    JEL: K32 K42 H71 C33
    Date: 2009–06
  5. By: Wunder, Christoph (University of Erlangen-Nuremberg); Schwarze, Johannes (University of Bamberg)
    Abstract: Posner (1995) proposes the redistribution of health spending from old women to old men to equalize life expectancy. His argument is based on the assumption that women's utility is higher if they are married. Thus, extending the lifespan of men would benefit women. Using life satisfaction data from the German Socio-Economic Panel Study (SOEP), we conduct an empirical test of this assumption. We apply a two-step estimation strategy: first, we use a propensity score matching approach to generate a control group of non-widowed women. The average level of life satisfaction in the control group serves as a reference to measure the degree of adaptation to widowhood. In the second step, the life satisfaction trajectories of both groups are estimated using penalized spline regressions. The results suggest bereavement has no enduring effect on life satisfaction, and that falsifies Posner's assumption.
    Keywords: widowhood, adaptation, subjective well-being, life satisfaction, penalized spline regression, propensity score matching
    JEL: C14 D10 I31
    Date: 2009–10
  6. By: Juhn, Chinhui (University of Houston); Kalemli-Ozcan, Sebnem (University of Houston); Turan, Belgi (University of Houston)
    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 a 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 that 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.
    Keywords: HIV/AIDS, fertility, economic development
    JEL: O12 I12 J13
    Date: 2009–10
  7. By: Halliday, Timothy (University of Hawaii at Manoa); He, Hui (University of Hawaii at Manoa); Zhang, Hao (University of Hawaii at Manoa)
    Abstract: We study the evolution of health investment over the life-cycle by calibrating a model of endogenous health accumulation. The model is able to produce the decline in labor supply with age as well as the hump-shaped consumption profile. In both cases, health and health investment play a crucial role as the former encroaches upon healthy time and the latter crowds out non-medical expenditures as people age. Finally, we quantify the value of health as both an investment and a consumption good. We show that the investment motive is about three times higher than the consumption motive during the early 20s, but decreases over the life-cycle until it disappears at retirement. In contrast, the consumption motive increases with age and surpasses the investment motive during the mid 40s.
    Keywords: health investment, structural model, medical expenditures
    JEL: I12
    Date: 2009–10
  8. By: Sonia Bhalotra; Samantha Rawlings
    Abstract: This paper investigates the sensitivity of the intergenerational transmission of health to exogenous changes in income, education and public health, changes that are often delivered by economic growth. It uses individual survey data on 2.24 million children born to 600000 mothers during 1970-2000 in 38 developing countries. These data are merged with macroeconomic data by country and birth cohort to create an unprecedentedly large sample of comparable data that exhibit massive variation in maternal and child health as well as in aggregate economic conditions. The country-level panel is exploited to control for aggregate shocks and trends in unobservables within countries, while a panel of children within mother is exploited to control for family-specific endowments and neighbourhood characteristics. Child health is indicated by infant survival and mother’s health by (relative) height. We find that improvements in mother’s education, income and public health provision that occur in the year of birth and the year before birth limit the degree to which child health is tied to family circumstance. The interaction (gradient) effects are, in general, most marked for shorter women suggesting that children are more likely to bear the penalty exerted by poor maternal health if they are conceived or born in adverse socio-economic conditions.
    Keywords: intergenerational transmission, early life conditions, health, infant mortality, height, growth, income, education, public health, gene, environment, in utero
    JEL: O12 I12
    Date: 2009–08
  9. By: Gil Lacruz, Ana Isabel (Departamento de Análisis Económico (Teoría e Historia Económica). Universidad Autónoma de Madrid.); Gil Lacruz, Marta (Universidad de Zaragoza.); Oliva Moreno, Juan (Universidad de Castilla la Mancha & FEDEA)
    Abstract: Sexually transmitted diseases pose an important public health problem around the world. Although many studies have explored the link between alcohol use and risky sexual practices, the unobserved differences among individuals make it difficult to assess whether the associations are casual in nature. In order to overcome these difficulties, we have obtained data from the Spanish Health and Sexual Behavior Survey (2003) in order to analyze risky sexual behaviors using four alternative methodologies: controlling results with a rich set of variables; identifying the impact of alcohol use while assuming there is an identical selection outcome for observed and unobserved variables; estimating alcohol consumption and risky sexual behaviors simultaneously based on instrumental variables; and using reduced-form equations to analyze the impact of alcohol prices and other alcohol policies on the likelihood of risky intercourse. We provide empirical evidence that alcohol abuse might increase the probability of risky sex and, more importantly, different alcohol policies are not only effective tools for reducing alcohol demand but also for controlling risky sexual behaviors.
    Keywords: alcohol; sexually transmitted diseases; unobserved individual heterogeneity.
    JEL: C3 H2 I1 R4
    Date: 2009–10
  10. By: David Epstein (Centre for Health Economics, University of York, UK); Dolores Jimenez-Rubio (University of Granada. Spain); Peter C Smith (Centre for Health Economics, University of York, UK); Marc Suhrcke (University of East Anglia, UK)
    Abstract: Reducing health inequalities is an important part of health policy in most countries. This paper discusses from an economic perspective how government policy can influence health inequalities, particularly focusing on the outcome of performance targets in England, and the role of sectors of the economy outside the health service – the ‘social determinants’ of health - in delivering these targets.
    Date: 2009–10
  11. By: Edvard Johansson; Petri Böckerman; Tuija Martelin; Sami Pirkola; Karí Poikolainen
    Abstract: ABSTRACT : The paper examines the causal effect of education on common individual mental disorders in adulthood. We use a representative population health survey and instrumental variable methods. The estimates point to mostly insignificant effects of education on common mental disorders. We find that the length of education reduces the BDI (Beck Depression Inventory) measure at the 10% significance level, but has no effect when using the GHQ-12 (12-item General Health Questionnaire) or the probability of severe depression as a measure of mental health. These results cast doubt on the view that the length of formal education would be a particularly important determinant of common mental disorders later in life.
    JEL: I12 I21
    Date: 2009–10–20
  12. By: Frank T. Denton; Byron G. Spencer
    Abstract: Since the prevalence of many chronic health conditions increases with age we might anticipate that as the population ages the proportion with one or more such conditions would rise, as would the cost of treatment. We ask three questions: How much would the overall prevalence of chronic conditions increase in a quarter century if age-specific rates of prevalence did not change? How much would the requirements for health care resources increase in those circumstances? How much difference would it make to those requirements if people had fewer chronic conditions? We conclude that the overall prevalence rates for almost all conditions associated mostly with old age would rise by more than 25 percent and that health care requirements would grow more rapidly than the population – more than twice as rapidly in the case of hospital stays – if the rates for each age group remained constant. We conclude also that even modest reductions in the average number of conditions at each age could result in substantial savings.
    Keywords: Chronic conditions, aging population, health care resources
    JEL: I10 J14
    Date: 2009–10

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