nep-hea New Economics Papers
on Health Economics
Issue of 2011‒04‒16
twenty-one papers chosen by
Yong Yin
SUNY at Buffalo, USA

  1. Quality and quantity: The role of social interactions in individual health By Fiorillo Damiano; Sabatini Fabio
  2. Medical Technology And The Production Of Health Care By Badi H. Baltagi; Francesco Moscone; Elisa Tosetti
  3. An Econometric Approach To Estimating Support Prices And Measures Of Productivity Change In Public Hospitals By C.J. O’Donnell; K. Nguyen
  4. On the causal effect of schooling on smoking: evidence without exogeneity conditions By Stefan Boes
  5. The Ryan Medicare Plan: Winners and Losers By Dean Baker; David Rosnick
  6. Assessing the Effectiveness of Health Care Cost Containment Measures By Ziebarth, Nicolas R.
  7. Can Economic Crises Be Good for Your Diet? By Dimova, Ralitza; Gang, Ira N.; Gbakou, Monnet Benoit Patrick; Hoffman, Daniel
  8. The Psychological Costs of War: Military Combat and Mental Health By Cesur, Resul; Sabia, Joseph J.; Tekin, Erdal
  9. Is part-time sick leave helping the unemployed? By Andrén, Daniela
  10. Reproductive Health Aid: A Delicate Balancing Act By Dalen, H.P. van; Micevska Scharf, M.
  11. Revisiting the Link between Maternal Employment and School-Aged Children Health Status in Developing Countries: An Instrumental Variable Approach By Risti Permani
  12. Socio-economic and Demographic factors affecting the likelihood of being an overweight Korean woman By Nambiar, P.M.; Florkowski, W.J.; Suh, Dong-Kyun
  13. Alcoholic Beverages and Cigarettes: Complements or Substitutes? A Pseudo Panel Approach By Koksal, Aycan; Wohlgenant, Michael
  14. Spatial disparities in hospital performances By Gobillon, Laurent; Milcent, Carine
  15. On decomposing the causes of changes in income-related health inequality with longitudinal data By Paul Allanson; Dennis Petrie
  16. Do management accounting systems influence organizational change or vice-versa? Evidence from a case of constructive research in the Healthcare Sector By Lino Cinquini; Cristina Campanale; Andrea Tenucci
  17. Childhood Obesity: An Economic Perspective By Crowle , Jacqueline; Turner, Erin
  18. Cigarette smoking in Indonesia: examination of a myopic model of addictive behaviour By Hidayat, Budi; Thabrany, Hasbullah
  19. Rural Hospital Ownership: Medical Service Provision, Market Mix, and Spillover Effects By Jill R. Horwitz; Austin Nichols
  20. Broadening Focus: Spillovers, Complementarities and Specialization in the Hospital Industry By Jonathan R. Clark; Robert Huckman
  21. An Overview of The Changing Body: Health, Nutrition, and Human Development in the Western World Since 1700 By Robert W. Fogel; Nathaniel Grotte

  1. By: Fiorillo Damiano; Sabatini Fabio
    Abstract: The public health literature focusing on the detrimental effects of social isolation has shown that the quantity of social connections is positively correlated with individual health. Drawing on pooled cross-sectional data, we test this hypothesis on a representative sample of the Italian population. Our findings show that, besides the quantity of interactions, it is their quality – as measured by subjective satisfaction derived from relationships with friends – that works as the best predictor of health. We point out the existence of health disparities based on socio-economic status. Poorer and less educated individuals are exposed to a higher probability of reporting poor health conditions. The risk is even worse for unemployed and retired workers. This paper contributes to the literature in two substantive dimensions. This is the first empirical study of the relationship between social interactions and health in Italy. Second, we add to previous studies by carrying out the first assessment of the role of satisfaction in interpersonal relations.
    Keywords: Health, well-being, satisfaction, social interactions, social capital, family, Italy
    JEL: I12 I18 Z1
    Date: 2011–03
  2. By: Badi H. Baltagi (Center for Policy Research, Maxwell School, Syracuse University, 426 Eggers Hall, Syracuse, NY 13244-1020); Francesco Moscone; Elisa Tosetti
    Abstract: This paper investigates the factors that determine differences across OECD countries in health outcomes, using data on life expectancy at age 65, over the period 1960 to 2007. We estimate a production function where life expectancy depends on health and social spending, lifestyle variables, and medical innovation. Our first set of regressions includes a set of observed medical technologies by country. Our second set of regressions proxy technology using a spatial process. The paper also tests whether in the long-run countries tend to achieve similar levels of health outcomes. Our results show that health spending has a significant and mild effect on health out- comes, even after controlling for medical innovation. However, its short-run adjustments do not seem to have an impact on health care productivity. Spatial spill overs in life expectancy are significant and point to the existence of interdependence across countries in technology adoption. Furthermore, nations with initial low levels of life expectancy tend to catch up with those with longer-lived populations.
    Keywords: Life expectancy, health care production, health expenditure, spatial dependence
    JEL: C31 C33 H51
    Date: 2011–03
  3. By: C.J. O’Donnell (CEPA - School of Economics, The University of Queensland); K. Nguyen
    Abstract: In industry sectors where market prices are unavailable it is common to represent multiple-input multiple-output production technologies using distance functions. Econometric estimation of such functions is complicated by the fact that more than one variable in the function may be endogenous. In such cases, maximum likelihood estimation can lead to biased and inconsistent estimates of the model parameters and associated measures of firm performance. We solve the problem by using linear programming to construct a quantity index. The distance function is then written in the form of a conventional stochastic frontier model where the explanatory variables are unambiguously exogenous. We use this approach to estimate productivity indexes and support (or shadow) prices for a sample of Australian public hospitals. We decompose the productivity index into several measures of environmental change and efficiency change. We find that the productivity effects of improvements in input-oriented technical efficiency have been largely offset by the effects of deteriorations in the production environment over time.
    Date: 2011–03
  4. By: Stefan Boes
    Abstract: The paper explores weak monotonicity and convexity assumptions in a model for the decision to smoke with endogenous schooling. Theories of productive and allocative efficiency as well as the influence of time preferences are accounted for in order to derive testable constraints that bound the effect of schooling on smoking. Data from the Swiss Health Survey indicate that the degree of endogeneity depends on the level of schooling, and that schooling effects are likely heterogeneous with a reduction of the propensity to smoke by at most 5.9 percentage points.
    Keywords: Smoking; education; health behavior; nonparametric bounds
    JEL: I12 C14 C30
    Date: 2011–04
  5. By: Dean Baker; David Rosnick
    Abstract: Representative Paul Ryan's proposed 2012 budget has been lauded as a path to prosperity, with much attetion given to his overhaul of the medicare system. Using data from the CBO analysis of the Ryan plan, this issue brief demonstrates that any savings to the government under the revamped medicare system places the burden of rising healthcare costs more squarely on the shoulders of beneficiaries.
    Keywords: Medicare, Ryan budget
    JEL: E E6 E62 I I1 I18 H H5 H51 H6 H63 H68
    Date: 2011–04
  6. By: Ziebarth, Nicolas R. (DIW Berlin)
    Abstract: Using SOEP panel data and difference-in-differences methods, this study is the first to empirically evaluate the effectiveness of four different health care cost containment measures within an integrated framework. The four measures investigated were introduced in Germany in 1997 to reduce moral hazard and public health expenditures in the market for convalescent care. Doubling the daily copayments was clearly the most effective cost containment measure, resulting in a reduction in demand of about 20 percent. Indirect measures such as allowing employers to cut statutory sick pay or paid vacation during health spa stays did not significantly reduce demand.
    Keywords: copayment, cost containment measures, health expenditures, convalescent care, SOEP
    JEL: H51 I11 I18 J22
    Date: 2011–03
  7. By: Dimova, Ralitza (University of Manchester); Gang, Ira N. (Rutgers University); Gbakou, Monnet Benoit Patrick (University of Hohenheim); Hoffman, Daniel (Rutgers University)
    Abstract: With fortuitously timed data – collected before, during and after a major macro-financial crisis in Bulgaria – we revisit several hypotheses in the economics and nutritional literature related to the tendency of households to smooth their nutritional status over time. We explore the dietary impact of both falling real incomes in the context of hyperinflation and crisis and changing relative prices and the changing responsiveness of different groups of people to these incomes and prices over six year of fundamental structural reforms of the economy. Our results highlight large and dramatically changing food and nutrient elasticities, which challenge the perception of household ability to smooth their nutrient stream during economic crises and transitions.
    Keywords: crisis, diet, fluctuation, health, nutrition
    JEL: E32 I12 P23 P24 P36
    Date: 2011–03
  8. By: Cesur, Resul (Georgia State University); Sabia, Joseph J. (U.S. Military Academy); Tekin, Erdal (Georgia State University)
    Abstract: While descriptive evidence suggests that deployment in the Global War on Terrorism is associated with adverse mental health, the causal effect of combat is not well established. Using data drawn from the National Longitudinal Study of Adolescent Health, we exploit exogenous variation in deployment assignment and find that soldiers deployed to combat zones where they engage in frequent enemy firefight or witness allied or civilian deaths are at substantially increased risk for suicidal ideation, psychological counseling, and post-traumatic stress disorder (PTSD). Our estimates imply lower-bound health care costs of $1.5 to $2.7 billion for combat-induced PTSD.
    Keywords: military service, post-traumatic stress disorder, depression
    JEL: H56 I1
    Date: 2011–04
  9. By: Andrén, Daniela (Department of Business, Economics, Statistics and Informatics)
    Abstract: Using a discrete choice one-factor model, we estimate mean treatment parameters and distributional treatment parameters to analyze the effects of degree of sick leave on the probability of full recovery of lost work capacity for employed and unemployed individuals, respectively. Our results indicate that one year after the sick leave spell started, the average potential impact of part-time sick listing on an individual randomly chosen from the population on sick leave was positive for both groups, but the average effect on those who actually were on part-time sick leave was positive only for the employed, and negative for the unemployed.
    Keywords: unemployed; part-time sick leave; selection; unobserved heterogeneity; treatment effects
    JEL: I12 J21 J28
    Date: 2011–03–31
  10. By: Dalen, H.P. van; Micevska Scharf, M. (Tilburg University, Center for Economic Research)
    Abstract: In this contribution the authors show that development assistance targeting reproductive health overwhelmingly concentrates on HIV/AIDS at the expense of family planning elements. Data on financial contributions disbursed by governments and private foundations are used as collected by the Resource Flows project as initiated by UNFPA/NIDI. The current allocation of aid does not accord well with the plans made in Cairo at the International Conference on Population and Development in 1994. Part of the explanation is that future health needs are difficult to predict, but it also shows how strong the influence of one donor, i.e. the United States, is in this setup. The landscape of population assistance is a highly volatile one, brought about not only by political issues like the Global Gag Rule, but also issues of collective action design as assistance under the heading of the Millennium Development Goals crowds out family planning. A complicating factor is that development assistance for reproductive health is at some points ill-adjusted towards the needs of developing countries.
    Keywords: health;development aid;AIDS;fertility
    JEL: F35 I18 H87
    Date: 2011
  11. By: Risti Permani (School of Economics, University of Adelaide)
    Abstract: This study analyses the link between maternal employment and the health status of the child. Using data from Indonesia, it uses mothers' risk averse measures, households' recent flood and drought experience, and the interactions between risk measures and experience of recent natural disasters to explain endogenous maternal employment as proxied by mothers' working hours. Critical values based on Stock and Yogo (2002) suggest that these are strong instruments. Moreover, the Hausman test suggests that the Instrumental Variable method is preferred to the Ordinary Least Squares method. However, estimates across differing specifications consistently suggest insignificant effects of maternal employment on children's health status. However, a mother's education and her health knowledge are important for child's well-being. In contrast, school's lunch programs, sanitation, sports and health facilities are not significantly associated with child's well-being. The results emphasise the roles of family compared to schools, in particular the roles of mothers in improving their children's well-being. In addition, there still seems to be inequality in the well-being of children between in urban and rural areas. Finally, this study finds no significant evidence of the link between hiring a domestic assistant, outside food consumption and a child's well-being.
    Keywords: maternal employment, school-aged children, children health status, instrumental variable, height z-score, Indonesian households, risk aversion, outside food consumption, domestic assistant
    JEL: I12 J13 J22
    Date: 2011–04
  12. By: Nambiar, P.M.; Florkowski, W.J.; Suh, Dong-Kyun
    Abstract: Using data from urban Korean women survey the study examines factors associated with the BMI >= 25, indicating overweight or obesity. Logit equation results identify low income, low education, household location and preference for convenience, sweet-tasting foods and home vegetable processing as characteristics linked to a high BMI.
    Keywords: BMI, Overweight, Korea, Woman, Socio-economic factors, Health Economics and Policy,
    Date: 2011
  13. By: Koksal, Aycan; Wohlgenant, Michael
    Abstract: In this paper, using pseudo panel data we analyze the relation between cigarette and alcoholic beverage consumption within the rational addiction framework. We believe that pseudo panel data approach has many advantages compared to aggregate and panel data models. We found that alcoholic beverages are complements for cigarettes, while it is not the same the other way around. Moreover, we found that alcohol is a gateway for cigarette which further supports our conclusion concerning the reinforcing effect of alcohol consumption on cigarette consumption. We believe that drinking works as a trigger for smoking especially in social settings like bars while it is also possible (although less likely) that people who want to cut cigarette consumption might increase alcohol consumption to cope with resulting stress, which induces an asymmetry in cross price elasticities. However we point out that the complementarity relationship is much stronger and significant. Policy implications for the results are explained and the direction for further research is addressed.
    Keywords: cigarette, alcohol, rational addiction, pseudo panel, Demand and Price Analysis,
    Date: 2011
  14. By: Gobillon, Laurent; Milcent, Carine
    Abstract: Spatial disparities in mortality can result from spatial di¤erences in patient characteristics, treatments, hospital characteristics, and local healthcare market structure. To distinguish between these explanatory factors, we estimate a flexible duration model on stays in hospital for a heart attack using a French exhaustive dataset. Over the 1998-2003 period, the raw disparities in the propensity to die within 15 days between the extreme regions reaches 80 %. It decreases to 47% after taking into account the patients' characteristics and their treatments. We conduct a variance analysis to explain regional disparities in mortality. Whereas spatial variations in the use of innovative treatments play the most important role, spatial di¤erences in the local concentration of patients also play a significant role.
    Keywords: Spatial Health Disparities; Economic Geography; Stratified Duration Model
    JEL: I11 C41
    Date: 2010–06
  15. By: Paul Allanson; Dennis Petrie
    Abstract: Regression-based decomposition procedures are used to both standardise the concentration index and to determine the contribution of inequalities in the individual health determinants to the overall value of the index. The main contribution of this paper is to develop analogous procedures to decompose the income-related health mobility and health-related income mobility indices first proposed in Allanson, Gerdtham and Petrie (2010) and subsequently extended in Petrie, Allanson and Gerdtham (2010) to account for deaths. The application of the procedures is illustrated by an empirical study that uses British Household Panel Survey (BHPS) data to analyse the performance of Scotland in tackling income-related health inequalities relative to England & Wales over the five year period 1999 to 2004.
    Keywords: decomposition, income-related health inequality, mobility analysis,longitudinal data
    JEL: D39 D63 I18
    Date: 2011–03
  16. By: Lino Cinquini (Laboratorio MeS, Scuola Superiore Sant’Anna, Pisa, Italy); Cristina Campanale (Laboratorio MeS, Scuola Superiore Sant’Anna, Pisa, Italy); Andrea Tenucci (Scuola Superiore Sant’Anna, Pisa, Italy)
    Abstract: The paper aims to analyze the process of change of management accounting system (MAS) as a consequence of changes in the complexity of organizational structure in healthcare. It analyzes the process of change of MAS according with the theoretical frameworks of Habermas (1987) and Laughlin (1991).In this organizational changes are seen as the consequence of the interaction between tangible and intangible elements of the organization and between the organization and the external environment. The process of change was not studied from an external standpoint, but through an active participation and contribution of the researchers in the process of change itself. Using a constructive approach, the researchers were actively involved with the actors of the change in developing the process of change, and in facilitating the overcoming of some cultural gaps and resistance which could arise in professional organization. The paper provides empirical insights of the characteristics of the process of change of MAS in a Heath Care setting with a particular focus on aspects characterizing the process of change itself. Finding suggests the importance of putting high attention in the development of the process of change and underlines how the attention to peculiarities of the organization, in to this phase, could make the MAS able to impact on the behaviours and culture of professionals.
    Keywords: Management Accounting Change, Healthcare Accounting, Habermas
    Date: 2010–06–01
  17. By: Crowle , Jacqueline (Productivity Commission); Turner, Erin (Productivity Commission)
    Abstract: This Productivity Commission staff working paper (by Jacqueline Crowle and Erin Turner) was released in October 2010. Being overweight or obese as a child has implications for the child’s health now and as an adult. It is a policy concern in Australia and for governments internationally. Preventative health policy aims to manage risk factors such as obesity to decrease the incidence and effect of subsequent health problems. However, such expenditure needs to be justified in terms of effectiveness and value for public money. Programs to prevent and reduce childhood obesity can be difficult to design and implement successfully, particularly given the complexity and multitude of different determinants of obesity. <p>This paper analyses the issue of childhood obesity within an economic policy framework. It also reviews the evidence of trends in obesity in children and provides an overview of recent and planned childhood obesity preventative health programs. <p>The views expressed in this paper are those of the staff involved and do not necessarily reflect those of the Productivity Commission.
    Keywords: childhood obesity; preventative health programs; obese; overweight; obesity
    JEL: I11
    Date: 2010–09
  18. By: Hidayat, Budi; Thabrany, Hasbullah
    Abstract: Using aggregated panel data taken from three waves of the Indonesian Family Life Survey (1993–2000), this article tests the myopic addiction behaviour of cigarette demand. Sensitivity analysis is done by examining a rational addiction behavior of cigarette demand. The results provide support for myopic addiction. The short- and long-run price elasticities of cigarette demand are estimated at −0.28 and −0.73 respectively. Excise taxes are more likely to act as an effective tobacco control in the long-run rather than a major source of government revenue.
    Keywords: cigarette consumption; myopic addictive models; methodology for panel data; Indonesia
    JEL: I12 C52 C33
    Date: 2010–03–22
  19. By: Jill R. Horwitz; Austin Nichols
    Abstract: Roughly one half of hospitals in the U.S. are in rural areas, yet researchers have largely studied the effects of hospital ownership in the urban context. We examine differences in the provision of profitable and unprofitable medical services in rural areas across nonprofit, for-profit, and government hospitals. We also consider the effect of hospital ownership mix within rural hospital markets. We find that rural nonprofit hospitals are more likely than for-profit hospitals to offer unprofitable services, many of which are underprovided services. Nonprofits respond less than for-profits to changes in service profitability. Nonprofits with more for-profit competitors offer more profitable services and fewer unprofitable services than those with fewer for-profit competitors.
    JEL: H1 I1 L1 L13 L22 L3
    Date: 2011–04
  20. By: Jonathan R. Clark; Robert Huckman
    Abstract: The long-standing argument that focused operations outperform others stands in contrast to claims about the benefits of broader operational scope. The performance benefits of focus are typically attributed to reduced complexity, lower uncertainty, and the development of specialized expertise, while the benefits of greater breadth are linked to the economies of scope achieved by sharing common resources, such as advertising or production capacity, across activities. Within the literature on corporate strategy, this tension between focus and breadth is reconciled by the concept of related diversification (i.e., a firm with multiple operating units, each specializing in distinct but related activities). We consider whether there are similar benefits to related diversification within an operating unit and examine the mechanism that generates these benefits. Using the empirical context of cardiovascular care within hospitals, we first examine the relationship between a hospital’s level of specialization in cardiovascular care and the quality of its clinical performance on cardiovascular patients. We find that, on average, focus has a positive effect on quality performance. We then distinguish between positive spillovers and complementarities to examine: (1) the extent to which a hospital’s specialization in areas related to cardiovascular care directly impacts performance on cardiovascular patients (positive spillovers) and (2) whether the marginal benefit of a hospital’s focus in cardiovascular care depends on the degree to which the hospital “co-specializes” in related areas (complementarities). In our setting, we find evidence of such complementarities in specialization.
    JEL: I1 L15 M11
    Date: 2011–04
  21. By: Robert W. Fogel; Nathaniel Grotte
    Abstract: This summary of The Changing Body: Health, Nutrition, and Human Development in the Western World since 1700 (Cambridge) was prepared for presentation at the University of Alabama at Birmingham School of Public Health in March 2011. The book is built on the authors’ work with 300 years of height and nutrition data and discusses their findings in the context of technophysio evolution, a uniquely modern form of rapid physiological development, the result of humanity’s ability to control its environment and create technological innovations to adapt to it.
    JEL: I1 N31 N33
    Date: 2011–04

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