nep-hea New Economics Papers
on Health Economics
Issue of 2010‒09‒11
25 papers chosen by
Yong Yin
SUNY at Buffalo, USA

  1. Convergence of the Health Status at the Local Level: Empirical Evidence from Austria By Martin Gächter; Engelbert Theurl
  2. Prediction of the economic cost of individual long-term care in the Spanish population By Catalina Bolancé; Ramon Alemany; Montserrat Guillén
  3. Left Behind: Intergenerational Transmission of Human Captial in the Midst of HIV/AIDS By Mevlude Akbulut-Yuksel; Belgi Turan
  4. Health Outcomes and Socio-Economic Status among the Elderly in China: Evidence from the CHARLS Pilot By Strauss, John; Lei, Xiaoyan; Park, Albert; Shen, Yan; Smith, James P.; Yang, Zhe; Zhao, Yaohui
  5. Attrition and Health in Ageing Studies: Evidence from ELSA and HRS By Banks, James; Muriel, Alastair; Smith, James P.
  6. Fatal Attraction? Access to Early Retirement and Mortality By Kuhn, Andreas; Wuellrich, Jean-Philippe; Zweimüller, Josef
  7. Optimality of no-fault medical liability systems By Kao, Tina; Vaithianathan, Rhema
  8. Climate Change, Economic Growth, and Health By Ikefuji, M.; Magnus, J.R.; Sakamoto, H.
  9. Private-Public Mix in Woman and Child Health in Low-Income Countries: An Analysis of Demographic and Health Surveys By Supon Limwattananon
  10. Regulation of Pharmaceutical Prices: Evidence from a Reference Price Reform in Denmark By Ulrich Kaiser; Susan J. Mendez; Thomas Rønde
  11. Public and Private Health Insurance in Germany: The Ignored Risk Selection Problem By Martina Grunow; Robert Nuscheler
  12. Dynamics of health insurance ownership in Vietnam, 2004 – 06 By Trong-Ha Nguyen; Suiwah Leung
  13. Long-term care: a suitable case for social insurance. By Barr, Nicholas
  14. The Impact of an Individual Health Insurance Mandate on Hospital and Preventive Care: Evidence from Massachusetts By Kowalski, A.;; Kolstad, J.;
  15. A Heap of Trouble? Accounting for Mismatch Bias in Retrospectively Collected Data on Smoking By Bar, H;; Lillard, D;
  16. Mental health, work incapacity and State transfers: an analysis of the British Household Panel Survey By Whittaker, W;; Sutton, M;
  17. Quality of Schooling and Inequality of Opportunity in Health By Jones, A;; Rice, N;; Rosa Dias, P;
  18. Low-income self-employed GPs: a preference for leisure? By Samson, A-L;
  19. Access to Abortion, Investments in Neonatal Health, and Sex-Selection: Evidence from Nepal By Valente, C.;
  20. State and self investments in health By Fichera1, E;; Sutton, M;
  21. Will Better Access to Health Care Change How Much Older Men Work? By Melissa A. Boyle; Joanna N. Lahey
  22. Biomedicine and EU Law: Unlikely Encounters? By Stéphanie Hennette-Vauchez
  23. Are Restaurants Really Supersizing America? By Anderson, Michael L.; Matsa, David A.
  24. Can Information Costs Confuse Consumer Choice?---Nutritional Labels in a Supermarket Experiment By Kiesel, Kristin; Villas-Boas, Sofia B.
  25. U.S. Health Care and Real Health in Comparative Perspective: Lessons from Abroad By Wilensky, Harold L.

  1. By: Martin Gächter; Engelbert Theurl
    Abstract: In comparisons of the welfare of individuals and socioeconomic aggregates of individuals (regions, states,...) the health status is an important dimension. In the following paper we focus on the question whether the health status between geographical subunits (local communities) converged/diverged in the time period 1969 - 2004 in Austria. We use age standardized mortality rates as indicators for the health status and analyse the convergence/divergence of overall mortality for (i) the whole population, for (ii) females, for (iii) males and for (iv) the gender gap in overall mortality. Convergence/Divergence is studied by applying different concepts of cross-regional inequality (weighted standard deviation, coefficient of variation, Theil-Coefficient of inequality). Various econometric techniques (weighted OLS, Quantile Regression, Kendall's Rank Concordance) are used to test for absolute and conditional beta-convergence in mortality. We find mixed results for the inequality measures applied. Absolute and conditional beta-convergence are confirmed both in weighted OLS as well as in quantile regression estimations, but we also find strong evidence for the existence of convergence clubs in mortality.
    Keywords: mortality, convergence, gender, health status, life expectancy, Austria
    JEL: I1 I3
    Date: 2010–09
  2. By: Catalina Bolancé (Departament d'Econometria, Estadística i Economia Espanyola, RFA-IREA, Universitat de Barcelona); Ramon Alemany (Departament d'Econometria, Estadística i Economia Espanyola, RFA-IREA, Universitat de Barcelona); Montserrat Guillén (Departament d'Econometria, Estadística i Economia Espanyola, RFA-IREA, Universitat de Barcelona)
    Abstract: Pensions together with savings and investments during active life are key elements of retirement planning. Motivation for personal choices about the standard of living, bequest and the replacement ratio of pension with respect to last salary income must be considered. This research contributes to the financial planning by helping to quantify long-term care economic needs.We estimate life expectancy from retirement age onwards. The economic cost of care per unit of service is linked to the expected time of needed care and the intensity of required services. The expected individual cost of long-term care from an onset of dependence is estimated separately for men and women. Assumptions on the mortality of the dependent people compared to the general population are introduced. Parameters defining eligibility for various forms of coverage by the universal public social care of the welfare system are addressed. The impact of the intensity of social services on individual predictions is assessed, and a partial coverage by standard private insurance products is also explored. Data were collected by the Spanish Institute of Statistics in two surveys conducted on the general Spanish population in 1999 and in 2008. Official mortality records and life table trends were used to create realistic scenarios for longevity. We find empirical evidence that the public long-term care system in Spain effectively mitigates the risk of incurring huge lifetime costs. We also find that the most vulnerable categories are citizens with moderate disabilities that do not qualify to obtain public social care support. In the Spanish case, the trends between 1999 and 2008 need to be further explored.
    Date: 2010–09
  3. By: Mevlude Akbulut-Yuksel; Belgi Turan (Department of Economics, Dalhousie University; Department of Economics, University of Houston)
    Keywords: HIV/AIDS, Intergenerational Transmission; Human Capital Investment; JEL: O12, I1, I2
    Date: 2010–09–03
  4. By: Strauss, John (University of Southern California); Lei, Xiaoyan (Peking University); Park, Albert (University of Oxford); Shen, Yan (Peking University); Smith, James P. (RAND); Yang, Zhe (Peking University); Zhao, Yaohui (Peking University)
    Abstract: We are concerned in this paper with measuring health outcomes among the elderly in Zhejiang and Gansu provinces, China, and examining the relationships between different dimensions of health status and measures of socio-economic status (SES). We use the China Health and Retirement Longitudinal Study (CHARLS) pilot data to document health conditions among the elderly in Gansu and Zhejiang provinces, where the survey was fielded. We use a very rich set of health indicators that include both self-reported measures and biomarkers. We also examine correlations between these health outcomes and two important indicators of socioeconomic status (SES): education and log of per capita expenditure (log pce), our preferred measure of household resources. While there exists a very large literature that examines the relationships between SES and health measures, little has been done on Chinese data to see whether correlations reported in many other countries are replicated in China, particularly so for the aged. In general education tends to be positively correlated with better health outcomes, as it is in other countries. However, unmeasured community influences turn out to be highly important, much more so than one usually finds in other countries. While it is not yet clear which aspects of communities matter and why they matter, we set up an agenda for future research on this topic. We also find a large degree of under-diagnosis of hypertension, a major health problems that afflicts the aged. This implies that the current health system is not well prepared to address the rapid aging of the Chinese population, at least not in Gansu and Zhejiang.
    Keywords: health, China
    JEL: I10
    Date: 2010–08
  5. By: Banks, James (Institute for Fiscal Studies, London); Muriel, Alastair (Institute for Fiscal Studies, London); Smith, James P. (RAND)
    Abstract: In this paper we present results of an investigation into observable characteristics associated with attrition in ELSA and the HRS, with a particular focus on whether attrition is systematically related to health outcomes and socioeconomic status (SES). Investigating the links between health and SES is one of the primary goals of the ELSA and HRS, so attrition correlated with these outcomes is a critical concern. We explored some possible reasons for these differences. Survey maturity, mobility, respondent burden, interviewer quality, and differing sampling methods all fail to account for the gap. Differential respondent incentives may play some role, but the impact of respondent incentive is difficult to test. Apparently, cultural differences between the US and Europe population in agreeing to participate and remain in scientific surveys are a more likely explanation.
    Keywords: health, attrition
    JEL: I0
    Date: 2010–08
  6. By: Kuhn, Andreas (University of Zurich); Wuellrich, Jean-Philippe (University of Zurich); Zweimüller, Josef (University of Zurich)
    Abstract: We estimate the causal effect of early retirement on mortality for blue-collar workers. To overcome the problem of endogenous selection, we exploit an exogenous change in unemployment insurance rules in Austria that allowed workers in eligible regions to withdraw from the workforce up to 3.5 years earlier than those in non-eligible regions. For males, instrumental-variable estimates show a significant 2.4 percentage points (about 13%) increase in the probability of dying before age 67. We do not find any adverse effect of early retirement on mortality for females. Death causes indicate a significantly higher incidence of cardiovascular disorders among eligible workers, suggesting that changes in health-related behavior explain increased mortality among male early retirees.
    Keywords: early retirement, mortality, premature death, health behavior, endogeneity, instrumental variable
    JEL: I1 J14 J26
    Date: 2010–08
  7. By: Kao, Tina; Vaithianathan, Rhema
    Abstract: This paper considers a model of defensive medicine where doctors are imperfect agents of insured patients. A national insurer subsidises both curative and preventive medical care consumed by risk averse patients. We show that in such an environment, the optimal liability regime is similar to the no-fault systems of Sweden and New Zealand where the doctor faces zero liability. The reason is that the subsidy on preventive medicine is a better instrument to induce the optimal level of care than the malpractice regime.
    Keywords: no-fault liability systems, malpractice liability, defensive medicine, copayment ratio
    JEL: I11 I18 D60
    Date: 2010–07
  8. By: Ikefuji, M.; Magnus, J.R.; Sakamoto, H. (Tilburg University, Center for Economic Research)
    Abstract: This paper studies the interplay between climate, health, and the economy in a stylized world with four heterogeneous regions, labeled ‘West’ (cold and rich), ‘China’ (cold and poor), ‘India’ (warm and poor), and ‘Africa’ (warm and very poor). We introduce health impacts into a simple integrated assessment model where both the local cooling effect of aerosols as well as the global warming effect of CO2 are endogenous, and investigate how those factors affect the equilibrium path. We show how some of the important aspects of the equilibrium, including emission abatement rates, health costs, and economic growth, depend on the economic and geographical characteristics of each region.
    Keywords: Climate change;health;economic growth;local dimming;cobenefits.
    JEL: D91 I18 Q54 Q58
    Date: 2010
  9. By: Supon Limwattananon
    Abstract: This paper provides an analysis of demographic and health surveys of Private-Public Mix in Women and Health in Low-Income countries. As always the Demographic and Health Survey is a very valuable source of data that can be used to understand health-seeking behaviour in developing countries by teasing out the sources of health care used by households. [Technical Partner Paper 1]
    Keywords: Demographic, Health, Surveys, Public, Private, household, valuable, care
    Date: 2010
  10. By: Ulrich Kaiser (University of Zurich); Susan J. Mendez (University of Zurich); Thomas Rønde (Copenhagen Business School)
    Abstract: On April 1, 2005, Denmark changed the way references prices, a main determinant of reimbursements for pharmaceutical purchases, are calculated. The previous reference prices, which were based on average EU prices, were substituted to minimum domestic prices. Novel to the literature, we estimate the joint effects of this reform on prices and quantities. Prices decreased more than 26 percent due to the reform, which reduced patient and government expenditures by 3.0 percent and 5.6 percent, respectively, and producer revenues by 5.0 percent. The prices of expensive products decreased more than their cheaper counterparts, resulting in large differences in patient benefits from the reform.
    Keywords: pharmaceutical markets; regulation; co-payments; reference pricing; asymmetric welfare effects
    JEL: I18 C23
    Date: 2010–08
  11. By: Martina Grunow (University of Augsburg, Department of Economics); Robert Nuscheler (University of Augsburg, Department of Economics)
    Abstract: While risk selection within the German public health insurance system has received considerable attention, risk selection between public and private health insurers has largely been ignored. This is surprising since – given the institutional structure – risk selection between systems is likely to be more pronounced. We find clear evidence for risk selection in favor of private insurers. While private insurers are unable to select the healthy upon enrollment they manage to dump high risk individuals who then end up in the public system. This gives private insurers an unjustified competitive advantage vis-à-vis public insurer. A risk adjusted compensation would mitigate this advantage.
    Keywords: risk selection, public and private health insurance, risk adjustment
    JEL: C13 C23 I10 I18
    Date: 2010–08
  12. By: Trong-Ha Nguyen; Suiwah Leung
    Abstract: Vietnam is undertaking health financing reform in an attempt to achieve universal health insurance coverage by 2014. Changes in health insurance policies have doubled the overall coverage between 2004 and 2006. However, close examination of Vietnam Living Standard Surveys during this period reveals that about one fifth of the insured in 2004 dropped out of the health insurance system by 2006. This paper uses longitudinal data from VHLSS 2004 and 2006 to investigate the characteristics of those who joined and those who left the health insurance system. We model the static and dynamic health insurance choices allowing for heterogeneity of choices. The results from both static and dynamic models highlight the importance of income and education in determining the movement in or out of a particular scheme. The results from the static models of health insurance determinants show significant adverse selection in the current health insurance system where individuals with bad health are more likely to be insured. The findings from the dynamic models of health insurance ownership also suggest that the current health insurance system entails significant adverse selection where people with worse health are more likely to join or stay in and less likely to move out of the system. Some policy implications to increase coverage and to maintain financial sustainability of the health insurance system are drawn.
    Keywords: health insurance, adverse selection, Vietnam
    JEL: I11 D12 O12
    Date: 2010–08
  13. By: Barr, Nicholas
    Abstract: There are potentially large welfare gains if people can buy insurance that covers the costs of long-term care. However, technical problems - largely information problems - face both the providers of insurance and potential buyers. These problems on both the supply and demand sides of the market suggest that the actuarial mechanism is not well suited to addressing risks associated with long-term care. This line of argument underpins the article's main conclusion - that social insurance is a better fit
    Date: 2010–08
  14. By: Kowalski, A.;; Kolstad, J.;
    Abstract: In April 2006, the state of Massachusetts passed legislation aimed at achieving near universal health insurance coverage. A key provision of this legislation, and of the national legislation passed in March 2010, is an individual mandate to obtain health insurance. In this paper, we use hospital data to examine the impact of this legislation on insurance coverage, utilization patterns, and patient outcomes in Massachusetts. We use a difference-in-difference strategy that compares outcomes in Massachusetts after the reform to outcomes in Massachusetts before the reform and to outcomes in other states. We embed this strategy in an instrumental variable framework to examine the effect of insurance coverage on outcomes. Among the population discharged from the hospital in Massachusetts, the reform decreased uninsurance by 28% relative to its initial level. Increased coverage affected utilization patterns by decreasing length of stay and the number of inpatient admissions originating from the emergency room. We also find evidence that outpatient care reduced hospitalizations for preventable conditions. At the same time we find no evidence that the cost of hospital care increased. The reform affected nearly all age, gender, income, and race categories. We identify some populations for which insurance had the greatest direct impact on outcomes and others for which the impact on outcomes appears to have occurred through spillovers.
    Date: 2010–07
  15. By: Bar, H;; Lillard, D;
    Abstract: When event data are retrospectively reported, more temporally distal events tend to get “heaped” on even multiples of reporting units. Heaping may introduce a type of attenuation bias because it causes researchers to mismatch time-varying right-hand side variables. We develop a model-based approach to estimate the extent of heaping in the data, and how it affects regression parameter estimates. We use smoking cessation data as a motivating example to describe our approach, but the method more generally facilitates the use of retrospective data from the multitude of cross-sectional and longitudinal studies worldwide that already have and potentially could collect event data.
    Keywords: count data; drinking; endogenous participation; maximum simulated likelihood; sample selection; treatment effects
    Date: 2010–07
  16. By: Whittaker, W;; Sutton, M;
    Abstract: The UK has experienced substantial increases in the number of individuals claiming work incapacity benefit (IB) and the proportion of people claiming IB for mental health reasons. Following high-profile reports claiming that intervention would cost the State nothing, the Government has increased the availability of psychological therapies. The cost-neutrality claim relied on two statistics: the proportion of IB claimants diagnosed with mental and behavioural disorders; and estimates of the costs to the State of periods on IB. These are cross-sectional associations. We subject these two associations to more rigorous longitudinal analysis using nationally representative data from seventeen waves (1991-2007) of the British Household Panel Survey (BHPS). We model the effect of depression on (a) State transfers and (b) the probability of being on IB whilst controlling for covariates and unobservable heterogeneity. Our results reveal that cross-sectional associations with depression are substantially cnfounded. The estimated effects of becoming depressed on State transfers reduce by 83% and 88%, and on the probability of claiming IB drop to just 0.4 and 0.7 percentage points, for males and females respectively. We conclude that the stated benefits of reducing depression for the State and for labour market participation have been substantially over-estimated.
    Keywords: Work incapacity, Mental health, Dynamic modelling, Unobserved heterogeneity
    JEL: C23 H51 I10 I18
    Date: 2010–08
  17. By: Jones, A;; Rice, N;; Rosa Dias, P;
    Abstract: This paper explores the role of quality of schooling as a source of inequality of opportunity in health. Substantiating earlier literature that links differences in education to health disparities, the paper uses variation in quality of schooling to test for inequality of opportunity in health. Analysis of the 1958 NCDS cohort exploits the variation in type and quality of schools generated by the comprehensive schooling reforms in England and Wales. The analysis provides evidence of a statistically significant and economically sizable association between some dimensions of quality of education and a range of health and health-related outcomes. For some outcomes the association persists, over and above the effects of measured ability, social development, academic qualifications and adult socioeconomic status and lifestyle.
    Keywords: Health; Quality of Education; Inequality of opportunity; NCDS
    JEL: I12 I28 C21
    Date: 2010–08
  18. By: Samson, A-L;
    Abstract: In France, each year between 1993 and 2004, 5 to 7% of general practitioners (GPs) earn less than 1.5 times the level of the French minimum wage. This article examines who are those low-income GPs using a representative panel of French self-employed GPs over the years 1993 to 2004. We .nd that experiencing low incomes, even during a short period of time, has a lasting impact on GPs. incomes over their whole career. Low-income GPs are mainly female or physicians practicing in areas where medical density is high but where the quality of life is also better. To test if low incomes result from a preference for leisure (ie if low-income GPs choose to work less than all other GPs or if they are constrained to), the econometric analysis consists of measuring GPs.reaction to a shock of demand. We show that low-income GPs never react to an increase in demand, while it would give them the opportunity to increase their activity and their incomes. They only react to negative shocks of demand, i.e. they decrease their activity when they are constrained to. Conversely, all other GPs always react to positive and negative shocks of demand : their activity is strongly constrained by the demand they are facing. We conclude that low-income GPs are physicians who choose to work less : to respond to the increasing demand by increasing their activity would reduce their utility. Their low incomes do not re.ect a downgrading of the GPs.profession, but rather one of its advantages: as self-employed, GPs can freely choose their number of hours of work. They may choose to work less.
    Keywords: labour supply; labour-leisure trade-off; GPs; self-employed; target income; longitudinal data
    JEL: I12 J22 C23
    Date: 2010–07
  19. By: Valente, C.;
    Abstract: The impact of abortion reforms on the human capital of subsequent generations, including health, has been documented in several developed countries. However, (i) evidence relative to the impact on health in early life is not unanimous, (ii) there is no evidence for a developing country, where health human capital is low, and (iii) existing econometric studies have been unable to disentangle the effect of abortion reform on individual behavior from that on the composition of mothers. In this paper, I exploit variation in the timing and location of newly introduced legal abortion centers in Nepal to estimate the effect of reducing the psychological and _nancial cost of abortion on fertility, investments in prenatal care, neonatal mortality, and sex-selection. Consistent with the prediction that the opening of a legal abortion center nearby reduces the cost of abortion, I find that the probability of a live birth conditional on conception decreases by 8.3 percentage points (9 percent of the mean), for a given mother. Similarly, the unconditional monthly probability of a live birth decreases by 0.4 percentage points (21 percent of the mean). However, there is no evidence that improved access to abortion increases observed investments in antenatal care and little evidence that it increases unobserved investments in neonatal health. Contrary to _ndings in Lin et al. (2008) for Taiwan, abortion reform in Nepal does not appear to have led to sex-selective terminations. On the contrary, there is some evidence that it may have led to a decrease in sex-selective abortion, which could be due to the substitution of first-trimester legal abortions to illegal abortions at a later gestational stage.
    Date: 2010–07
  20. By: Fichera1, E;; Sutton, M;
    Abstract: We consider how individuals' decisions on their health behaviours depend on the level of investment in their health provided by the State. We develop the model provided by Ehrlich and Becker (1972) and Peltzman (1975) and we show that higher levels of protection provided by the State (either through the increased availability or effectiveness of medical care) can crowd out or reinforce self-insurance. We apply this model to the smoking cessation decision made by individuals diagnosed with a cardiovascular disease in waves of the Health Survey of England between 1993 and 2006. There has been a considerable increase in the proportion of these individuals who receive prescriptions of statins from the State, a highly effective drug that reduces the probability of further heart attacks and premature death. We nd that the probability of quitting smoking is increased by four percentage points amongst those individuals prescribed statins. This result is robust to allowing for the direct effects of smoking advice. When the potential endogeneity of doctors' decision to prescribe statins is dealt with using variables in national guidelines, we find that unobservable characteristics which make people more prone to stop smoking reduce the probability of receiving statins and the evidence of the complementarity between quitting smoking and prescription of statins is confirmed.
    Keywords: Crowding-out; moral hazard; preventative behaviour; drugs
    JEL: C25 C35 D01 I12 I18
    Date: 2010–09
  21. By: Melissa A. Boyle; Joanna N. Lahey
    Abstract: The move toward universal health coverage in the United States is likely to impact the labor force decisions of older workers, but the size and direction of the effect is unclear. On the one hand, access to affordable insurance that is not tied to an employer may reduce work by encouraging workers to leave a current job, perhaps shifting to self-employment or retiring earlier than previously planned. On the other hand, such access could increase work among vulnerable groups, such as those with low incomes, by improving either their health or the work incentives that they face. This brief provides some insights on how workers might respond by assessing the impact of a health care expansion by the U.S. Department of Veterans Affairs (VA). The first section describes the VA expansion and the possible impact of public health care insurance on labor force decisions. The second section explains the study’s methodology, while the third summarizes the results. The final section offers a conclusion. The main finding is that, for the average recipient, the VA reform decreases full-time work both by reducing the “job lock” associated with employer-based insurance and by boosting income through offering free coverage. More-educated workers take advantage of this health care to move to self-employment, while less-educated workers are more likely to leave the labor force completely. However, those in groups who typically have worse health than average actually increase their work upon provision of coverage. With respect to implications for the new federal health care reform act, the income boost in the VA example does not apply for most individuals because health insurance under the new act will not be free. Thus, for the average worker, the finding on job lock is most relevant. However, for some workers, the new act may also have an income effect by subsidizing coverage or reducing the price of non-group market insurance.1 Finally, our finding of increased employment rates for groups likely to be in worse health may also apply as states design programs to improve their access to health care.
    Keywords: savings and consumption, health
    Date: 2010–08
  22. By: Stéphanie Hennette-Vauchez
    Abstract: Over the last decade, a significant body of biomedical law has emerged within EU law. In so far as the EU has long been portrayed as aiming mostly if not only at economic integration, it is surprising at face value to see issues such as human embryonic stem cell research or trade in oocytes even reach the EU's political and legal agenda. Although it is possible to argue that the puzzle waters down when one considers not only that EU has in fact always been open to 'non-market' values on the one hand but also that biomedical issues have themselves undergone radical transformations recently, as one commonly speaks now of 'Tissue Economies', these elements do not seem to suffice for explaining the development of a body of biomedical law within EU law. It is argued here that many of the legal technicalities that sustain the view that the EU does not have any straightforward competences in the field have been balanced by the specifically 'polity-building' dimension of 'Ethics' (and here bioethics). In other words, the research presented here establishes several manners in which 'Ethics'' have been instrumental in the EU law making process, thus bridging EU law and biomedicine and simultaneously enabling the EU to assert itself as polity.
    Date: 2010–06–15
  23. By: Anderson, Michael L.; Matsa, David A.
    Abstract: While many researchers and policymakers infer from correlations between eating out and body weight that restaurants are a leading cause of obesity, a basic identification problem challenges these conclusions. We exploit the placement of Interstate highways in rural areas to obtain exogenous variation in the effective price of restaurants and examine the impact on body mass. We find no causal link between restaurant consumption and obesity. Analysis of food-intake micro-data suggests that consumers offset calories from restaurant meals by eating less at other times. We conclude that regulation targeting restaurants is unlikely to reduce obesity but could decrease consumer welfare.
    Keywords: economics of regulation, health production, obesity, fat tax
    Date: 2010–07–01
  24. By: Kiesel, Kristin; Villas-Boas, Sofia B.
    Abstract: This paper investigates whether information costs prevent consumers from making healthier food choices under currently regulated nutritional labels in a market-level experiment. Implemented nutritional shelf labels reduce information costs by either repeating information available on the Nutritional Facts Panel, or providing information in a new format. We analyze microwave popcorn purchases using weekly store-level scanner data from both treatment and control stores in a difference-in-differences and synthetic control method approach. Our results suggest that information costs affect consumer purchase decisions. In particular, no trans fat labels significantly increase sales, even though this information is already available on the package. Low calorie labels significantly increase sales, while correlated low fat labels significantly decrease sales, suggesting that labeling response may also be influenced by consumers' taste perceptions. Finally, combining multiple claims in a single label reduces the effectiveness of the implemented labels. Our results provide direct implications for changes to the format and content of nutritional labeling currently considered by the Food and Drug Administration.
    Date: 2009–12–16
  25. By: Wilensky, Harold L.
    Abstract: Among the 19 rich democracies I have studied for the past 40 years, the United States is odd-man-out in its health-care spending, organization, and results. The Obama administration might therefore find lessons from abroad helpful as it moves toward national health insurance. In the past hundred years, with the exception of the U.S., the currently rich democracies have all converged in the broad outlines of health care. They all developed central control of budgets with financing from compulsory individual and employer contributions and/or government revenues. All have permitted the insured to supplement government services with additional care, privately purchased. All, including the United States, have rationed health care. All have experienced a growth in doctor density and the ratio of specialists to primary-care personnel. All evidence a trend toward public funding. Our deviance consists of no national health insurance, a huge private sector, a very high ratio of specialists to primary-care physicians and nurses, and a uniquely expensive (non)system with a poor cost-benefit ratio. The cure: increase the public share to more than 65% from its present level of 45%. In regards to funding the transition cost and the permanent cost of guaranteed universal coverage: no rich democracy has funded national health insurance without relying on mass taxes, especially payroll and consumption taxes. Whatever we do to begin, broad-based taxes will be the outcome. Three explanations of "why no national health insurance in the U.S.?" are examined.
    Date: 2010–02–01

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