nep-hea New Economics Papers
on Health Economics
Issue of 2010‒07‒10
fifteen papers chosen by
Yong Yin
SUNY at Buffalo, USA

  1. On the Fuzzy Boundaries between Public and Private in Health Care Organization and Funding Systems By Alessandro Petretto
  2. The Macroeconomics of Health Savings Accounts By Juergen Jung; Chung Tran
  3. Heterogeneity in the Intergenerational Transmission of Alcohol Consumption – A Quantile Regression Approach By Christoph M. Schmidt; Harald Tauchmann
  4. Sex Workers and Condom Use-the Political Economy of HIV/AIDS in Bangladesh By Raihana Karim; Nasheeba Selim; Sabina Faiz Rashid
  5. Who benefits from public spending on health care in Asia? By Owen O’Donnell; Anup Karan; Aparnaa Somanathan; Badri Raj Pande; Charu C. Garg; Chiu Wan Ng; Deni Harbianto; Eddy van Doorslaer; Gabriel M. Leung; Kanjana Tisayaticom; Keith Tin; Laksono Trisnantoro; Mohammed N. Huq; Piya Hanvoravongchai; Ravi P. Rannan-Eliya; Shiva Raj Adhikari; Yuhui Zhang; Yuxin Zhao
  6. The indirect effect of fine particulate matter on health through individuals' life-style By Di Novi, Cinzia
  7. Happy House: Spousal weight and individual well-being By Clark, A.;; Etilé, F.;
  8. Does Hospital Competition Improve Efficiency? An Analysis of the Recent Market-Based Reforms to the English NHS By Zack Cooper; Stephen Gibbons; Simon Jones; Alistair McGuire
  9. Spousal Health Shocks and the Timing of the Retirement Decision in the Face of Forward-Looking Financial Incentives By Courtney Harold Van Houtven; Norma B. Coe
  10. Income And Bargaining Effects On Education And Health By Ponczek, Vladimir
  11. Understanding Overeating and Obesity By Christopher J. Ruhm
  12. Maternal Health and the Baby Boom By Stefania Albanesi; Claudia Olivetti
  13. Medicare Part D and the Financial Protection of the Elderly By Gary V. Engelhardt; Jonathan Gruber
  14. Retirement Decisions of People with Disabilities: Voluntary or Involuntary By Margaret Denton; Jennifer Plenderleith; James Chowhan
  15. Body size and wages in Europe: A semi-parametric analysis By Vincent A. Hildebrand; Philippe Van Kerm

  1. By: Alessandro Petretto (Università degli Studi di Firenze, Dipartimento di Scienze Economiche)
    Abstract: The paper proposes a survey of health care organization and funding systems in order to underline and discuss, in this specific field of social assistance, the combination public versus private provision and production of services. The survey then examines the present features of various National health services focusing on the efficiency and equity of public intervention and on the industrial organization of the institutional design of health care. In this context, it treats the rationale of cost-benefit of vertical integration of structures, devoted respectively to purchasing and providing health care services. Further, the paper considers the advantages and disadvantages of managed competition in quasi-markets and, finally, it deals with insurance systems, social as well private and supplementary ones. From the survey it turns out that the main distinctions of health care regimes in industrialised countries are not in terms of private versus public ownership of providers, rather in terms of industrial organization setting and in terms of the proportion of public versus private expenditure.
    Keywords: Health care organization, health care funding, social insurance, private and public provision.
    JEL: I1 H1 H4
    Date: 2010
  2. By: Juergen Jung (Department of Economics, Towson University); Chung Tran (Department of Economics, University of New South Wales)
    Abstract: We analyze whether the introduction of Health Savings Accounts (HSAs), which is a health insurance reform coupled with a capital tax reform, can reduce health care expenditures in the United States and increase the fraction of the population with health insurance. Unlike previous studies on HSAs, our analysis relies on a general equilibrium framework and therefore fully accounts for feedback effects from general equilibrium price changes. Our results from numerical simulations indicate that the introduction of HSAs increases the percentage of the working age population with health insurance in the long run but fails to control spending on health care. The outcome of a HSAs reform depends critically on the annual contribution limits to HSAs and the interplay of general equilibrium effects. Finally, the long-run tax revenue loss due to the introduction of HSAs is large and can amount to up to 5 percent of GDP.
    Keywords: Health saving accounts, health care reform, privatization of health care systems, health insurance, stochastic dynamic general equilibrium model with health.
    JEL: H51 I18 I38
    Date: 2010–06
  3. By: Christoph M. Schmidt; Harald Tauchmann
    Abstract: This paper addresses the question of whether the effect of parental drinking on children’s later consumption of alcohol – which is frequently found to be of positive sign – exhibits a certain pattern of heterogeneity. In particular, if this eff ect is more prominent in the upper tail than elsewhere in the distribution of children’s alcohol consumption, conventional regression analyses that focus on the mean eff ect may substantially underrate parental drinking as a risk factor for children’s later alcohol abuse. In our empirical application, we address this issue by applying censored quantile regression methods to German survey data. The supposed pattern of heterogeneity is indeed found in the data, at least for daily parental drinking. In addition, the intergenerational transmission of alcohol consumption exhibits gender-specific heterogeneity.
    Keywords: Alcohol consumption; intergenerational transmission; heterogeneity; censored quantile regression
    JEL: C14 I12 J62
    Date: 2010–04
  4. By: Raihana Karim; Nasheeba Selim; Sabina Faiz Rashid
    Abstract: A study was undertaken in Madaripur brothel to understand condom use reality within the social context of the commercial sex workers' (CSW) lives in brothel and to critically analyze BRAC's HIV/AIDS programme's effectiveness in condom promotion. It was found that the chukris (bonded sex workers) were controlled by the sardarnis (madam) and the sardarnis did not promote condom use among the chukris as most of them (sardarnis) only bothered about money and about keeping on high client flow to the chukris, in context of most of the clients refusing to use condoms and even willing to pay double the rate for not using condoms. On the other hand, the older sex workers were found less in demand, and did not have the financial power to bargain condom use with the clients. The HIV/AIDS programme, one of the two wings of BRAC's brothel based intervention was found over-shadowed by and preoccupied with the activities of the other wing, ‘Microfinance’. Furthermore, for distributing condom the brothel based staff targeted only the bariwalis and sardarnis who belonged to the top of brothel hierarchy, and never tried to reach the chukris who consisted of the majority of the brothel community. Moreover, though BRAC was supposed to provide condom to the CSWs at subsidized rate (100 condoms for Tk. 10), the brothel based staff delivered it at much higher price, Tk. 20-25. Thus, BRAC's brothel based HIV/AIDS intervention was facing the opposite way of promoting condom use among the brothel based CSWs.[Working Paper No. 4]
    Keywords: Madaripur, commercial sex workers, sardarnis, condoms, HIV/AIDS, Microfinance
    Date: 2010
  5. By: Owen O’Donnell; Anup Karan; Aparnaa Somanathan; Badri Raj Pande; Charu C. Garg; Chiu Wan Ng; Deni Harbianto; Eddy van Doorslaer; Gabriel M. Leung; Kanjana Tisayaticom; Keith Tin; Laksono Trisnantoro; Mohammed N. Huq; Piya Hanvoravongchai; Ravi P. Rannan-Eliya; Shiva Raj Adhikari; Yuhui Zhang; Yuxin Zhao
    Abstract: In this paper the benefit incidence of public health care subsidies in eleven Asian territories, including India, Indonesia and two provinces of China is examined. The use of concentration indices and a high degree of consistency in the application of methods provide results that, unlike much of the existing evidence, are comparable across countries.[Working Paper No.3]
    Keywords: public health care, benefit incidence analysis, Asia
    Date: 2010
  6. By: Di Novi, Cinzia
    Abstract: Limited literature has been published on the association between environmental health indicators, life-style habits and ambient air pollution. We have examined the association of asthma prevalence and the amount of health investment with daily mean concentrations of particulate matter (PM) with a mass median aerodynamic diameter less than 2.5 mm (PM2.5) in 16 metropolitan areas in U.S. using the Behavioral Risk Factor Surveillance System (2001) data in conjunction with the Air Quality System data collected by the Environmental Protection Agency. A multivariate probit approach has been used to estimate recursive systems of equations for environmental health outcomeand life-styles. A piecewise linear relationship has been postulated to describe the association between health outcome, health investment and pollution using the procedure mkspline from STATA 10. This model has allowed for fitting a "breakpoint" in the probit functions. We have assumed one change point at AQI value of 100 which corresponds to the US national air quality standard. The most interesting result concerns the influence of pollution on health-improving life-style choices: below a specified threshold concentration (AQI=100) a positive linear association exists between exposure to PM2.5 and health investments; above the threshold the association becomes negative. Hence, only if ambient pollution is in the 'satisfactory range' (AQI level at or below 100), individuals will have incentive to invest in health.
    Keywords: health production, multivariate probit, mkspline, lifestyle, fine particulate, asthma
    JEL: I12 C31 D13 D81 Q25
    Date: 2010–06
  7. By: Clark, A.;; Etilé, F.;
    Abstract: We use life satisfaction and Body Mass Index (BMI) information from three waves of the GSOEP to test for social interactions in BMI between spouses. Semi-parametric regressions show that partner’s BMI is, beyond a certain level, negatively correlated with own satisfaction. Own BMI is positively correlated with satisfaction in thin men, and negatively correlated with satisfaction after some threshold. Critically, this latter threshold increases with partner’s BMI when the individual is overweight. The negative well-being impact of own BMI is thus lower when the individual’s partner is heavier. This is consistent with social contagion effects in weight. However, this cross-partial effect is insignificant in instrumental variable regressions, suggesting that the uninstrumented relationship reflects selection on the marriage market or omitted variables, rather than contagion.
    Keywords: Obesity; subjective well-being; BMI; social interactions
    JEL: C14 I12 I3
    Date: 2010–06
  8. By: Zack Cooper; Stephen Gibbons; Simon Jones; Alistair McGuire
    Abstract: This paper uses a difference-in-difference estimator to test whether the introduction of patientchoice and hospital competition in the English NHS in January 2006 has prompted hospitalsto become more efficient. Efficiency was measured using hospitals' average length of stay(LOS) for patients undergoing elective hip replacement. LOS was broken down into its twokey components: the time from a patient's admission until their surgery and the time fromtheir surgery until their discharge. Our results illustrate that hospitals exposed to competitionafter a wave of market-based reforms took steps to shorten the time patients were in thehospital prior to their surgery, which resulted in a decrease in overall LOS. We find thathospitals shortened patients' LOS without compromising patient outcomes or by operating onhealthier, wealthier or younger patients. Our results suggest that hospital competition withinmarkets with fixed prices can increase hospital efficiency.
    Keywords: Hospital Competition, Market Structure, Prospective Payment, Incentive Structure
    JEL: C21 I18 L1 R0
    Date: 2010–06
  9. By: Courtney Harold Van Houtven; Norma B. Coe
    Abstract: A long and still growing strand of the retirement literature examines the role financial incentives play in the timing of the retirement decision. A more recent second strand of work has focused on the role of health shocks in the retirement decision. This paper combines these two components of the literature in order to measure the marginal impact of current wealth (including pension accrual), forward-looking financial incentives (peak-value pension wealth), and health shocks on married individuals’ retirement decision. This paper helps to clarify whether previously omitted forward-looking financial incentives can explain the strong role attributed to health shocks in the retirement decisions of coupled individuals. We find that financial incentives are the most important determinant of retirement behavior empirically. A husband is about half as responsive to his wife’s financial incentives as he is to his own. Interestingly, we find that married men are responsive to their wives’ health shocks, on both the intensive and extensive margin, but find wives’ decisions concerning work are largely unaffected by their husbands’ health shocks.
    Date: 2010–06
  10. By: Ponczek, Vladimir
    Abstract: In this paper, we examine the impacts of the reform in the rural pension system in Brazil in 1991 onschooling and health indicators. In addition, we use the reform to investigate the validity of the unitarymodel of household allocation by testing if there were uneven impacts on those indicators depending onthe gender of the recipient. The main conclusion of the paper is that the reform had significantly positiveeffects on the outcomes of interest, especially on those co-residing with a male pensioner, indicating thatthe unitary model is not a well-specified framework to understand family allocation decisions. Thehighest impacts were on school attendance for boys, literacy for girls and illness for middle-age people.We explore a collective model as defined by Chiappori (1992) as one possible alternative representationfor the decision-making process of the poor rural Brazilian families. In the cooperative Nash equilibrium,the reform effects can be divided into two pieces: a direct income effect and bargaining power effect. Thedata support the existence of these two different effects
    Date: 2010–05–05
  11. By: Christopher J. Ruhm
    Abstract: The combination of economic and biological factors is likely to result in overeating, in the current environment of cheap and readily available food. This propensity is shown using a “dual-decision” approach where choices reflect the interaction between two parts of the brain: a “deliberative” system, operating as in standard economic models, and an “affective” system that responds rapidly to stimuli without considering long-term consequences. This framework is characterized by excess food consumption and body weight, in the sense that individuals prefer both ex-ante and ex-post to eat and weigh less than they actually do, with dieting being common but often unsuccessful or only partially successful. As in the standard model, weight will be related to prices. However, another potentially important reason for rising obesity is that food producers have incentives to engineer products to stimulate the affective system so as to encourage overeating. Data from multiple waves of the National Health and Nutrition Examination Surveys are used to investigate predictions of the dual-decision model, with the evidence providing broad support for at least some irrationality in food consumption.
    JEL: I12 I18
    Date: 2010–07
  12. By: Stefania Albanesi; Claudia Olivetti
    Abstract: U.S. fertility rose from a low of 2.27 children for women born in 1908 to a peak of 3.21 children for women born in 1932. It dropped to a new low of 1.74 children for women born in 1949, before stabilizing for subsequent cohorts. We propose a novel explanation for this boom-bust pattern, linking it to the huge improvements in maternal health that started in the mid 1930s. Our hypothesis is that the improvements in maternal health contributed to the mid-twentieth century baby boom and generated a rise in women's human capital, ultimately leading to a decline in desired fertility for subsequent cohorts. To examine this link empirically, we exploit the large cross-state variation in the magnitude of the decline in pregnancy-related mortality and the differential exposure by cohort. We find that the decline in maternal mortality is associated with a rise in fertility for women born between 1921 and 1940, with a rise in college and high school graduation rates for women born in 1933-1950, and with a decline in fertility for women born in 1941-1950. These findings are consistent with a theory of fertility featuring a trade-off between the quality and quantity of children. The analysis provides new insights on the determinants of fertility in the U.S. and other countries that experienced similar improvements in maternal health.
    JEL: J11 J13 J24 N12 N3 N92
    Date: 2010–07
  13. By: Gary V. Engelhardt; Jonathan Gruber
    Abstract: We examine the impact of the expansion of public prescription drug insurance coverage from Medicare Part D on the elderly and find evidence of substantial crowd-out. Using detailed data from the 2002-7 waves of the Medical Expenditure Panel Survey (MEPS), we estimate that the extension of Part D benefits resulted in 80% crowd-out of both prescription drug insurance coverage and prescription drug expenditures of those 65 and older. Part D is associated with only modest reductions in out-of-pocket spending. This suggests that the welfare gain from protecting the elderly from out-of-pocket spending risk through Part D has been small.
    JEL: H51 I18
    Date: 2010–07
  14. By: Margaret Denton; Jennifer Plenderleith; James Chowhan
    Abstract: While some retirement is welcomed and on-time, other retirements are involuntary or forced due to the loss of a job, an early retirement incentive, a health problem, mandatory retirement, lack of control with too many job strains, or to provide care to a family member. An analysis of the 2002 Canadian General Social Survey reveals that 27% of retirees retired involuntarily. This research focuses on the disabled population in Canada and considers factors that influence voluntary and involuntary retirement. Further, consideration is given to the economic consequences of retiring involuntarily. This research will examine issues surrounding retirement and disability through statistical analysis of the Canadian Participation and Activity Limitations Survey (PALS) 2006 data. Methods include the use of descriptive statistics and logistic regression analysis to determine the characteristics associated with involuntary retirement. This study found that those who retired involuntarily were more likely to have the following socio-demographic and socio-economic characteristics: age 55 or less, less than high school education, live in Quebec, rent their home, and have relatively low income. They were also more likely to be worse off financially after retirement and to be receiving social assistance or a disability benefit. In terms of disability, the likelihood of retiring involuntarily was greater for those with poor health at retirement, the age of onset was over 55, higher level of severity, and multiple types of disability. For the discussion, a social inequalities framework is used, where health selection into involuntary retirement depends on social location defined by age and education. Policy initiatives that reduce the effects of disability, and allow individuals to remain in or return to the labour force such as workplace accommodations are discussed.
    Keywords: Retirement, Disabled, Health, Labour Force
    JEL: J14
    Date: 2010–06
  15. By: Vincent A. Hildebrand; Philippe Van Kerm
    Abstract: Evidence of the association between wages and body size –typically measured by the body mass index– appears to be sensitive to estimation methods and samples, and varies across gender and ethnic groups. One factor that may contribute to this sensitivity is the non-linearity of the relationship. This paper analyzes data from the European Community Household Panel survey and uses semi-parametric techniques to avoid functional form assumptions and assess the relevance of standard models. If a linear model for women and a quadratic model for men fit the data relatively well, they are not entirely satisfactory and are statistically rejected in favour of semiparametric models which identify patterns that none of the parametric specifications capture. Furthermore, when we use height and weight in the models directly, rather than equating body size with the body mass index, the semi-parametric models reveal a more complex picture with height having additional effects on wages. We interpret our results as consistent with the existence of a wage premium for physical attractiveness rather than a penalty for unhealthy weight.
    Keywords: Body Mass Index; obesity; wages; partial linear models; ECHP
    JEL: C14 J31 J71
    Date: 2010–06

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