nep-hea New Economics Papers
on Health Economics
Issue of 2010‒01‒16
sixteen papers chosen by
Yong Yin
SUNY at Buffalo, USA

  1. The Effects of a Sick Pay Reform on Absence and on Health-Related Outcomes By Patrick A. Puhani; Katja Sonderhof
  2. Determinants and Consequences of Health Behaviour: New Evidence from German Micro Data By Brit S. Schneider; Udo Schneider
  3. Healthy aging versus demographic trends: the French case, estimated by markovian microsimulation methods By Sophie Thiébaut; Andrew Armstrong; Bruno Ventelou
  4. Economic Inequality and HIV in Malawi By Durevall, Dick; Lindskog, Annika
  5. The Irish 'Health Basket': An International Perspective By Smith, Samantha
  6. Re-Activating Primary Health Centres Through Industrial Partnership in Tamilnadu Is it a Sustainable Model of Partnership? By Varatharajan D
  7. Winning Big but Feeling no Better? The Effect of Lottery Prizes on Physical and Mental Health By Benedicte Apouey; Andrew E. Clark
  8. Health-enhancing Activities and the Environment: How Competition for Resources Makes the Environmental Policy Beneficial By Xavier Pautrel
  9. Fatter Attraction: Marital Status and the Relationship between BMI and Labor Supply By Sonia Oreffice; Climent Quintana-Domeque
  10. Meeting Total Fat Requirements for School Lunches: Influences of School Policies and Characteristics By Newman, Constance; Guthrie, Joanne; Mancino, Lisa; Ralston, Katherine; Musiker, Melissa
  11. Fruit and Vegetable Consumption by Low-Income Americans: Would a Price Reduction Make a Difference? By Dong, Diansheng; Lin, Biing-Hwan
  12. Are Drinkers Prone to Engage in Risky Sexual Behaviors? By Ana I. Gil Lacruz; Marta Gil Lacruz; Juan Oliva
  13. On the Rise of Health Spending and Longevity By Raquel Fonseca; Pierre-Carl Michaud; Titus Galama; Arie Kapteyn
  14. Maternal Literacy and Child Malnutrition in India By Borooah, Vani / K
  15. Terrorist Incidents in India, 1998–2004: A Quantitative Analysis of Fatality Rates By Borooah, Vani / K
  16. Value Creation in Health Care: The Case of the Princesse Grace Hospital (CHPG) Monaco By Böbel, Ingo; Martis, Amrita

  1. By: Patrick A. Puhani; Katja Sonderhof
    Abstract: We evaluate the effects of a reduction in sick pay from 100 to 80% of the wage. Unlike previous literature, apart from absence from work, we also consider effects on doctor/hospital visits and subjective health indicators. We also add to the literature by estimating both switch-on and switch-off effects, because the reform was repealed two years later. We find a two-day reduction in the number of days of absence. Quantile regression reveals higher point estimates (both in absolute and relative terms) at higher quantiles, meaning that the reform predominantly reduced long durations of absence. In terms of health, the reform reduced the average number of days spent in hospital by almost half a day, but we cannot find robust evidence for negative effects on health outcomes or perceived liquidity constraints.
    Keywords: Sickness pay, absenteeism, health expenditure, hospitalization, difference-indifferences, switch on, switch off, quantile regression, intrinsic motivation
    JEL: I18 J58 J83
    Date: 2009
  2. By: Brit S. Schneider; Udo Schneider
    Abstract: The economic costs of chronic health conditions and severe illnesses like diabetes, coronary heart disease or cancer are immense. Several clinical trials give information about the importance of individual behaviour for the prevalence of these illnesses. Changes in health relevant behaviour may therefore lead to a decline of avoidable illnesses and related health care costs. In this context, we use German micro data to identify determinants of smoking, drinking and obesity. Our empirical approach allows for the simultaneity between adverse health behaviour and self-reported health as a measure of the individual health capital stock. We can show that health behaviour is related to the socioeconomic status of an individual. Furthermore, we find gender-specific differences in behaviour as well as differences in the determinants of drinking, smoking and heavy body weight in particular.
    Keywords: Health behaviour, multivariate probit, education, labour force participation
    JEL: I12 C31 D12
    Date: 2009
  3. By: Sophie Thiébaut (GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - Université de la Méditerranée - Aix-Marseille II - Université Paul Cézanne - Aix-Marseille III - Ecole des Hautes Etudes en Sciences Sociales (EHESS) - CNRS : UMR6579, Unité 912 - INSERM : U912); Andrew Armstrong (NATSEM - National Centre for Social and Economic Modelling); Bruno Ventelou (GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - Université de la Méditerranée - Aix-Marseille II - Université Paul Cézanne - Aix-Marseille III - Ecole des Hautes Etudes en Sciences Sociales (EHESS) - CNRS : UMR6579, Epidémiologie et Sciences Sociales Appliquées à l'Innovation Médicale - INSERM : U379 - Université de la Méditerranée - Aix-Marseille II)
    Abstract: The Objective of this paper is to test the consequences of changes in health status of future cohorts of French elderly on healthcare expenditures. We value the precise effect of epidemiological and life expectancy changes on health expenditures for 2025 by using a markovian microsimulation model for a representative database of the contemporary cohorts in France. The originality of these simulations holds in the use of an aggregate indicator of morbidity-mortality, capturing a vital risk and making possible to adapt the quantification of the life expectancies by taking into account of a life without incapacity and/or of the presence of severe pathologies. We forecast a reliable range for future national health spending, under different epidemiological scenarios of morbidity: benchmark case (BM), healthy aging (HA), healthy aging and medical progress (AM). We obtain an evaluation of the annual growth rates in health expenditure accounted for solely by aging: +1.18%; +0.95%; +1.38% according to the scenarios BM; HA; AM. In short, the effective decreases in morbidity rates are not sufficient enough to compensate the massive arrival of baby-boomers at elderly age in France for the period 2010- 2025.
    Keywords: health ; health policy ; simulation method ; econometrics ; social security ; planning Models
    Date: 2009–12–30
  4. By: Durevall, Dick (Department of Economics, School of Business, Economics and Law, Göteborg University); Lindskog, Annika (Department of Economics, School of Business, Economics and Law, Göteborg University)
    Abstract: This study analyzes the relationship between economic inequality and the spread of HIV among young Malawian women. We estimate multi-level logistic models of the individual probability of being HIV infected. Two different community levels are considered; the immediate neighbourhood, and Malawi’s districts. The main finding is a strong positive association between communal inequality and the risk of HIV infection. The relationship between HIV status and income, at the communal and the individual levels, is less clear-cut, but individual absolute poverty does not increase the risk of HIV infection. Further analysis shows that the HIV-inequality relationship is related to riskier sexual behavior, gender violence, and close links to urban areas, measured by return migration. It does not seem to be related to worse health in more unequal communities, or gender gaps in education or women’s market work.<p>
    Keywords: Africa; AIDS; communal; health; multilevel models; poverty; wealth
    JEL: I12
    Date: 2009–12–28
  5. By: Smith, Samantha
    Keywords: Health basket/qec
    Date: 2009–12
  6. By: Varatharajan D
    Abstract: The paper analyses the rationale, content and implications of the government policy of involving industrial units to improve the Primary Healthcare Centres (PHCs) in Tamil Nadu. [WP No. 10].
    Keywords: Tamil Nadu, Primary Healthcare, centres, PHCs, government policy, industrial units, SUSTAINABLE, utilization, population, GDP, hospital, vulnerable, poor sections, non-health sector, institutions, public private partnership, PPP
    Date: 2009
  7. By: Benedicte Apouey (Paris School of Economics); Andrew E. Clark (Paris School of Economics and IZA Bonn)
    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 well-known 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.
    Keywords: Income, Self-assessed health, Mental health, Smoking, Drinking
    JEL: D1 I1 I3
    Date: 2009–11
  8. By: Xavier Pautrel (Institut d’Economie et de Management de Nantes-IAE, Université de Nantes)
    Abstract: In a two-period overlapping generations model, this paper demonstrates that the relationship between the environmental taxation and the economic activity (level- and growth-output) becomes inverted-U shaped, when the detrimental impact of pollution on health and the private decision of each working-age agent to improve her health are taken into account. Especially, a tighter environmental tax is more likely to promote (rather than to harm) output-level and –growth when health is very sensitive to pollution, the weight of health in preferences is high, the polluting capacity of the production technology is high and the rate of natural purification of pollutants is low. The inverted-U shaped relationship between the environmental tax and the economic activity is due to a positive effect arising from the competition for resources between the final output sector and the health-enhancing activities that offsets the conventional detrimental “drag-down effect” for low values of the environmental tax. We also demonstrate that the link between the environmental tax and the lifetime welfare is inverted-U shaped as well. Finally, we investigate the social optimum and the determinants of the optimal environmental tax.
    Keywords: Growth, Environment, Health, Overlapping Generations
    JEL: Q5
    Date: 2009–12
  9. By: Sonia Oreffice (University of Alicante); Climent Quintana-Domeque (Universitat d’Alacant & FEDEA)
    Abstract: We empirically analyze the labor supply choices of married men and women according to their body size (BMI), using data from the Panel Study of Income Dynamics on anthropometric characteristics of both spouses, and unmarried men and women as comparison group. Heavier husbands are found to work significantly more hours and earn more labor income, controlling for both spouses’ demographic and socioeconomic characteristics. Conversely, no such effect is found for either unmarried individuals or for married women. We suggest a marriage market mechanism through which male BMI and earnings are positively related. Heavier married men compensate for their negative physical trait by providing their wives with more disposable income, working more hours and earning more. Heavier women may not able to compensate their spouse through labor supply, as female physical traits are more relevant in the marriage market than the corresponding male traits.
    Keywords: Body Size, Labor Supply, Earnings, Marriage
    JEL: D1 I1 J1 J22
    Date: 2009–12
  10. By: Newman, Constance; Guthrie, Joanne; Mancino, Lisa; Ralston, Katherine; Musiker, Melissa
    Abstract: Concerns about child obesity have raised questions about the quality of meals served in the National School Lunch Program. Local, State, and Federal policymakers responded to these concerns beginning in the mid-1990s by instituting a range of policies and standards to improve the quality of U.S. Department of Agriculture-subsidized meals. Schools have been successful in meeting USDA nutrient standards except those for total fat and saturated fat. This report uses school-level data from the School Nutrition Dietary Assessment-III to calculate statistical differences between the fat content of NSLP lunches served by schools with different policies (e.g., menu planning) and characteristics like region and size. Positive associations are found between a mealâs fat content and the presence of a la carte foods and vending machines, which are thought to indirectly affect the nutrient content of USDA-subsidized meals.
    Keywords: National School Lunch Program (NSLP), obesity, nutrition, Agricultural and Food Policy, Food Consumption/Nutrition/Food Safety, Health Economics and Policy, Institutional and Behavioral Economics,
    Date: 2009–11
  11. By: Dong, Diansheng; Lin, Biing-Hwan
    Abstract: Americansâ diets, particularly those of low-income households, fall short of Government recommendations in the quantity of fruits and vegetables consumed. Some proposals suggest that a price subsidy for those products would encourage low-income Americans to consume more of them. This study estimated that a 10-percent subsidy would encourage low-income Americans to increase their consumption of fruits by 2.1-5.2 percent and vegetables by 2.1-4.9 percent. The annual cost of such a subsidy for lowincome Americans would be about $310 million for fruits and $270 million for vegetables. And most would still not meet Federal dietary recommendations.
    Keywords: Price subsidy, demand elasticity, food consumption, fruits and vegetables, low income, Homescan Data, Supplemental Nutrition Assistance Program (SNAP), National Health and Nutrition Examination Survey (NHANES), and MyPyramid, Agricultural and Food Policy, Consumer/Household Economics, Demand and Price Analysis,
    Date: 2009–01
  12. By: Ana I. Gil Lacruz; Marta Gil Lacruz; Juan Oliva
    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.
    Date: 2009–11
  13. By: Raquel Fonseca; Pierre-Carl Michaud; Titus Galama; Arie Kapteyn
    Abstract: The authors use a calibrated stochastic life-cycle model of endogenous health spending, asset accumulation and retirement to investigate the causes behind the increase in health spending and life expectancy over the period 1965-2005. They estimate that technological change along with the increase in the generosity of health insurance may explain independently 53% of the rise in health spending (insurance 29% and technology 24%) while income less than 10%. By simultaneously occurring over this period, these changes may have lead to a "synergy" or interaction effect which helps explain an additional 37% increase in health spending. They estimate that technological change, taking the form of increased productivity at an annual rate of 1.8%, explains 59% of the rise in life expectancy at age 50 over this period while insurance and income explain less than 10%.
    Keywords: demand for health, health spending, insurance, technological change, longevity
    JEL: I10 I38 J26
    Date: 2009–12
  14. By: Borooah, Vani / K
    Abstract: This study uses unit-record data on over 50,000 rural children, from the sixteen major states of India, to analyse the determinants of the risks of severe stunting and of being severely underweight. The importance of this study derives from the fact that the prevalence of under-nourishment in India is, even relative to other poor countries, shockingly high. The study focuses on the role of maternal literacy in reducing the risk of child malnourishment. It concludes that when the mother is literate, real benefits flow to children in terms of reduced risk; the same benefits, however, do not flow when the father, but not the mother, is literate. Literate mothers make more effective use of health-care institutions, like anganwadis and hospitals. Consequently, the benefits to children from expanding the supply of such institutions are greater when these institutions interact with mothers who are literate.
    Keywords: Malnutrition; Maternal Literacy; Bivariate Probit Model
    JEL: J16
    Date: 2009
  15. By: Borooah, Vani / K
    Abstract: Using data from the University of Maryland’s Global Terrorism Database II, this paper first provides information on the nature of terrorist incidents in India in the period 1998-2004: the Indian states that were worst affected by terrorist incidents and fatalities; the terrorist groups responsible for such incidents and their modus operandi. Next, the paper focuses on the issue of fatalities from terrorist incidents. It inquires into the extent to which the number of fatalities following an incident was influenced by the type of attack (bombings, armed assault, etc.) and the extent to which it was influenced by the type of terrorist group. By examining the number of fatalities resulting from terrorist attacks in India, the paper disentangles the influence on this number of attack type and attack group. Lastly, the paper applies Atkinson’s concept of equality-adjusted income to terrorism to arrive at the concept of equality-adjusted deaths from terrorist incidents: in order to avoid spectacular incidents resulting in the loss of a large number of lives—as in New York on September 11, 2001 and in Mumbai 26–29 November 2008—‘‘society’’ might be prepared to tolerate ‘‘low-grade’’ terrorism which resulted in a larger number of deaths in total but avoided a large number of deaths from a single iconic incident.
    Keywords: attack type; India; terrorism; terrorist groups
    JEL: K42
    Date: 2009
  16. By: Böbel, Ingo; Martis, Amrita
    Abstract: Health care has to make transitions to be truly effective in the modern world. A change in paradigm is needed. This requires that value - defined as the health outcome for a particular medical condition per unit of cost expended - must be applied and added to health care, and health care itself must be treated as a business that performs in a competitive environment to ultimately provide client or customer satisfaction. Health care today is typically service specific, necessitating that the client or patient visits different medical or clinical departments to get the range of treatment prescribed for his/her condition. We argue – following Porter and Teisberg - that health care should be patient-centric and that organization and treatment should be planned accordingly. Such planning must take into account the provision of a range of services directly accessible or networked regionally taking full advantage of technological advances in the field of medical technology and informational systems. We examine whether such principles are currently being applied in Monaco (specifically in the Centre Hospitalier Princesse Grace) taking into account both Monaco’s unique positioning and its geographical context in relation to the French health system as well as the resulting interaction in networking relationships. We explore how value in healthcare is currently being added and investigate plans for augmenting such efforts. Aspects of preventative and innovative initiatives are also discussed as a means of enhancing value. Finally, we offer a set of recommendations that in the context of the local situation might be successfully applied. Continuous review of performance and the application of best practice and technologies are proposed to ensure that the provision of health care services can compete with the best in the world.
    Keywords: Health care; value creation in health care; Monaco; Southern France
    JEL: I18 I10
    Date: 2009–12–11

This nep-hea issue is ©2010 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.