nep-hea New Economics Papers
on Health Economics
Issue of 2011‒05‒30
twenty-two papers chosen by
Yong Yin
SUNY at Buffalo, USA

  1. HIV/AIDS and Conflict: Micro Evidence from Burundi By Matthias Rieger
  2. Portability of Pension, Health, and Other Social Benefits: Facts, Concepts, Issues By Holzmann, Robert; Koettl, Johannes
  3. Flu Shots, Mammograms, and the Perception of Probabilities By Carman, Katherine Grace; Kooreman, Peter
  4. Health Effects on Children's Willingness to Compete By Bartling, Björn; Fehr, Ernst; Schunk, Daniel
  5. Gender Patterns in Vietnam's Child Mortality By Pham, Thong Le; Kooreman, Peter; Koning, Ruud H.; Wiersma, Doede
  6. The Economics of Risky Health Behaviors By Cawley, John; Ruhm, Christopher J.
  7. Cardiovascular Consequences of Unfair Pay By Falk, Armin; Menrath, Ingo; Verde, Pablo Emilio; Siegrist, Johannes
  8. "Are genetically modified foods bad for my health?". Individuals' valutation and the choice among different information sources By Sergio Beraldo; Stefania Ottone; Gilberto Turati
  9. The Impact of Private Hospital Insurance on Utilization of Hospital Care in Australia: Evidence from the National Health Survey By Damien Eldridge; Catagay Koc; Ilke Onur; Malathi Velamuri
  10. The Lombardy Health Care System By Elenka Brenna
  11. Healthcare Choices, Information and Health Outcomes By Adhvaryu, Achyuta; Nyshadham, Anant
  12. Income and Longevity Revisited: Do High-earning Women Live Longer? By Friedrich Breyer; Jan Marcus
  13. How Well Does the U.S. Government Provide Health Insurance? By Manan Roy
  14. Market Inefficiency, Insurance Mandate and Welfare: U.S. Health Care Reform 2010 By Chung Tran; Juergen Jung
  15. The Impact of Chernobyl on Health and Labour Market Performance By Hartmut Lehmann; Jonathan Wadsworth
  16. The relationship between happiness and health: evidence from Italy By Sabatini, Fabio
  17. The causes of childhood obesity: A survey By Papoutsi, Georgia; Drichoutis, Andreas; Nayga, Rodolfo
  18. Isolating the Effect of Major Depression on Obesity: Role of Selection Bias By Dhaval M. Dave; Jennifer Tennant; Gregory J. Colman
  19. Is Universal Health Care in Brazil Really Universal? By Guido Cataife; Charles J. Courtemanche
  20. Disability, Pension Reform and Early Retirement in Germany By Axel H. Boersch-Supan; Hendrik Juerges
  21. The Doctor Might See You Now: The Supply Side Effects of Public Health Insurance Expansions By Craig L. Garthwaite
  22. Impacts of Household Credit on Education and Healthcare Spending by the Poor in Peri-urban Areas in Vietnam By Tinh Doan; John Gibson; Mark Holmes

  1. By: Matthias Rieger (IHEID, The Graduate Institute of International and Development Studies, Geneva)
    Abstract: This paper studies the relationship between civil war and HIV/AIDS in Burundi. It contributes to the empirical literature by providing micro level evidence using an identification strategy based on original data on the dynamics of rebel movements. The presence of exit and entry points from and to rebel safe havens is used to generate exogenous variation in conflict intensity. These points are plausibly assumed to serve as starting or end points for rebel attack, but are not directly related to HIV/AIDS or correlated with unobservables. The case of Burundi provides fruitful grounds of analysis, as seroprevalence rates are heterogeneous across the country, the serological and conflict data for Burundi is of good quality and conclusions are likely to serve as valuable insights in Burundi and other fragile countries with similar HIV/AIDS policy agendas. OLS, instrumental variable and binary response model results indicate that within provinces in Burundi there is no clear-cut relationship between local conflict intensity and seroprevalence, condom knowledge and use, knowledge of test opportunities and actual test taking, or rape. Findings suggest that although HIV/AIDS is a general development priority, it is not as urgent a post-conflict priority as commonly assumed.
    Keywords: HIV, AIDS, Civil War, Instrumental Variables, Burundi
    Date: 2011–05–25
  2. By: Holzmann, Robert (University of Vienna); Koettl, Johannes (World Bank)
    Abstract: Portability of social benefits across professions and countries is an increasing concern for individuals and policy makers. Lacking or incomplete transfers of acquired social rights are feared to negatively impact individual labor market decisions as well as capacity to address social risks with consequences for economic and social outcomes. The paper gives a fresh and provocative look on the international perspective of the topic that has so far been dominated by social policy lawyers working within the framework of bilateral agreements; the input by economists has been very limited. It offers an analytical framework for portability analysis that suggests separating the risk pooling, (implicit or actual) pre-funding and redistributive elements in the benefit design and explores the proposed alternative approach for pensions and health care benefits. This promising approach may serve both as a substitute and complement to bi- and multilateral agreements.
    Keywords: portability, acquired rights, migration, bilateral agreements, risk pooling
    JEL: D91 F22 F53 G23 J61
    Date: 2011–05
  3. By: Carman, Katherine Grace (Tilburg University); Kooreman, Peter (Tilburg University)
    Abstract: We study individuals' decisions to decline or accept preventive health care interventions such as flu shots and mammograms. In particular, we analyze the role of perceptions of the effectiveness of the intervention, by eliciting individuals' subjective probabilities of sickness and survival, with and without the interventions. Respondents appear to be aware of some of the qualitative relationships between risk factors and probabilities. However, on average they have very poor perceptions of the absolute probability levels as reported in the epidemiological literature. Perceptions are less accurate if a respondent is female and has no college degree. Perceived probabilities significantly affect the subsequent take-up rate of flu shots and mammograms.
    Keywords: preventive health care, probability perceptions
    JEL: I10
    Date: 2011–05
  4. By: Bartling, Björn (University of Zurich); Fehr, Ernst (University of Zurich); Schunk, Daniel (University of Zurich)
    Abstract: The formation of human capital is important for a society’s welfare and economic success. Recent literature shows that child health can provide an important explanation for disparities in children's human capital development across different socio-economic groups. While this literature focuses on cognitive skills as determinants of human capital, it neglects non-cognitive skills. We analyze data from economic experiments with preschoolers and their mothers to investigate whether child health can explain developmental gaps in children's non-cognitive skills. Our measure for children's non-cognitive skills is their willingness to compete with others. Our findings suggest that health problems are negatively related to children's willingness to compete and that the effect of health on competitiveness differs with socio-economic background. Health has a strongly negative effect in our sub-sample with low socioeconomic background, whereas there is no effect in our sub-sample with high socio-economic background.
    Keywords: willingness to compete, non-cognitive skills, human capital, health, household survey studies
    JEL: C90 I10 J24
    Date: 2011–05
  5. By: Pham, Thong Le (Cantho University); Kooreman, Peter (Tilburg University); Koning, Ruud H. (University of Groningen); Wiersma, Doede (University of Groningen)
    Abstract: We analyze child mortality in Vietnam focusing on gender aspects. Contrary to several other countries in the region, mortality rates for boys are substantially larger than for girls. A large rural-urban mortality difference exists, but much more so for boys than for girls. A higher education level of the mother reduces mortality risk, but the effect is stronger for girls than for boys.
    Keywords: child mortality, gender differences, hazard rate, frailty model
    JEL: C13 C31 C35 C41 I12
    Date: 2011–05
  6. By: Cawley, John (Cornell University); Ruhm, Christopher J. (University of Virginia)
    Abstract: Risky health behaviors such as smoking, drinking alcohol, drug use, unprotected sex, and poor diets and sedentary lifestyles (leading to obesity) are a major source of preventable deaths. This chapter overviews the theoretical frameworks for, and empirical evidence on, the economics of risky health behaviors. It describes traditional economic approaches emphasizing utility maximization that, under certain assumptions, result in Pareto-optimal outcomes and a limited role for policy interventions. It also details nontraditional models (e.g. involving hyperbolic time discounting or bounded rationality) that even without market imperfections can result in suboptimal outcomes for which government intervention has greater potential to increase social welfare. The chapter summarizes the literature on the consequences of risky health behaviors for economic outcomes such as medical care costs, educational attainment, employment, wages, and crime. It also reviews the research on policies and strategies with the potential to modify risky health behaviors, such as taxes or subsidies, cash incentives, restrictions on purchase and use, providing information and restricting advertising. The chapter concludes with suggestions for future research.
    Keywords: health behaviors, alcohol, tobacco, smoking, drugs, obesity, diet, food, physical activity, public health, public policy, taxation, subsidies, addiction, externalities, advertising, information, behavioral economics, neuroeconomics, human capital, education, prices, sex, income, time preference, peers, bounded rationality, medical costs, employment, wages, crime, hyperbolic discounting
    JEL: I1 I20 I18 D01 H2 D1 D6 D87 D83 J1 Q18
    Date: 2011–05
  7. By: Falk, Armin (University of Bonn); Menrath, Ingo (University of Duesseldorf); Verde, Pablo Emilio (University of Duesseldorf); Siegrist, Johannes (University of Duesseldorf)
    Abstract: This paper investigates physiological responses to perceptions of unfair pay. In a simple principal agent experiment agents produce revenue by working on a tedious task. Principals decide how this revenue is allocated between themselves and their agents. In this environment unfairness can arise if an agent's reward expectation is not met. Throughout the experiment we record agents' heart rate variability. Our findings provide evidence of a link between perceived unfairness and heart rate variability. The latter is an indicator of stress-related impaired cardiac autonomic control, which has been shown to predict coronary heart diseases in the long run. Establishing a causal link between unfair pay and heart rate variability therefore uncovers a mechanism of how perceptions of unfairness can adversely affect cardiovascular health. We further test potential adverse health effects of unfair pay using data from a large representative data set. Complementary to our experimental findings we find a strong and highly significant association between health outcomes, in particular cardiovascular health, and fairness of pay.
    Keywords: fairness, social preferences, inequality, heart rate variability, health, experiments, SOEP
    JEL: D63 C91
    Date: 2011–05
  8. By: Sergio Beraldo; Stefania Ottone; Gilberto Turati
    Abstract: We investigate the role of information on consumers’ valuation for food products containing genetically modified organisms (GMOs), using data from a specifically designed survey. We provide three main results. First, we show that introducing mandatory labels to identify whether or not a food product contains GMOs, significantly reduces consumers’ valuation. Second, adding to the label additional information on GMOs significantly affects valuation. Third, no matter the sign of the information previously received, consumers are more willing to trust General Practitioners (GPs), the information source they prefer most. Overall, these results indicate that the crucial issue is not the presence of the label per se, but the availability of the necessary information to make good use of the label content to assess potential health risks deriving from GM foods. In particular, our findings suggest that this can be achieved by properly informing (and convincing) GPs and other health professionals that risks for human health are minimal.
    Keywords: Genetically modified foods, information, health risks, General practitioners, labelling.
    JEL: C91 D82
    Date: 2011–04
  9. By: Damien Eldridge (Department of Economics, La Trobe University); Catagay Koc (University of Texas at Arlington, USA); Ilke Onur (University of South Australia, Australia); Malathi Velamuri (Victoria University of Wellington, New Zealand)
    Abstract: We use the 2004-'05 wave of the Australian National Health Survey to estimate the impact of private hospital insurance on the utilization of hospital care services in Australia. We employ the two-stage residual inclusion approach (2SRI) to account for the endogeneity of supplementary private hospital insurance purchases. Health care consumption is measured by two variables: hospitalization, and the number of nights spent in hospital. We apply a negative binomial type II model to estimate the utilization of hospital services. We calculate moral hazard based on a dierence-of-means estimator. Our three-stage estimation framework provides evidence of selection into private hospital insurance in Australia. We nd strong evidence of moral hazard when we treat private hospital insurance as exogenous. After controlling for the endogeneity of hospital insurance, we nd strong and robust evidence of substitution from public to private hospital care but no evidence of ex-post moral hazard in the number of nights spent in hospital.
    Keywords: Health Insurance, Health Care Consumption, Moral Hazard EDIRC Provider-Institution: RePEc:edi:sblatau
    JEL: I11 I18 C35
    Date: 2011–01
  10. By: Elenka Brenna (DISCE, Università Cattolica)
    Abstract: In the very recent past, the Lombardy health care system - established on the quasi-market model – has caught the interest of researchers and politicians in different OECD countries1. The merits of the model, compared to other Italian regional models, are the control of health care spending and the balanced budget, in a frame of good quality of services and patient choice. This paper stems from a literature review and tries to analyse the evolution of this regional system, the institutional path that brought to the implementation of the model, its theoretical basis, its merits and criticism. The period considered ranges from 1997, when the reform was enacted, to 2010.
    Keywords: quasi-market, health care system, Italian NHS reforms.
    JEL: I18
    Date: 2011–05
  11. By: Adhvaryu, Achyuta (Yale University); Nyshadham, Anant (Yale University)
    Abstract: Self-selection into healthcare options biases estimates of the effects of healthcare on health outcomes. We exploit exogenous variation in the cost of formal-sector care to show that the use of such care improves short-term health outcomes for acutely ill children in Tanzania. Better treatment-specific information, rather than greater access to medicines, appears to be the primary mechanism for this effect: children who use formal-sector care are as a result more likely to get timely treatment and adhere to their medications.
    JEL: I10 I18 O10 O12
    Date: 2011–03
  12. By: Friedrich Breyer (Department of Economics, University of Konstanz, Germany); Jan Marcus (DIW Berlin, Germany)
    Abstract: The empirical relationship between income and longevity has been addressed by a large number of studies, but most were confined to men. For the first time we analyze a large data set from the German public pension scheme on women who died between 1994 and 2005, employing both non-parametric and parametric methods. We find that the relationship between earnings and life expectancy is similar for women and men: Among women who contributed at least for 25 years, women at the 90th percentile of the income distribution can expect to live 3 years longer than women at the 10th percentile.
    Keywords: Life expectancy and income, women, public pensions, Germany
    JEL: I12 H55
    Date: 2011–05–16
  13. By: Manan Roy (Southern Methodist University)
    Abstract: The debate over universal health insurance (HI) in the U.S., as well as the proper role of the government in the HI market, has been quite heated. Fueling this debate is the uncertainty pertaining to the benefits of HI in general, and the relative benefits of private versus public HI in particular. This uncertainty stems from non-random selection into different types of HI (private, public, or none) in combination with the absence of experimental data. Moreover, the lack of typical exclusion restrictions complicates identification of the causal effects of different HI types. Here, the aim is to assess the causal impact of private HI, relative to public HI, on the insured infant's health. To that end, this study employs the methodology proposed in Altonji et al. (2005) which trades off what can be learned in exchange for not requiring an exclusion restriction. Nonetheless, the method remains quite informative in the present context. Specifically, using data from the Early Childhood Longitudinal Survey, Birth Cohort (ECLS-B), along with several measures of infant health, the results suggest that while private HI is {\it associated}\ with improved infant health, this association disappears once selection on observables and unobservables is considered. In fact, the estimated effects of private HI are predominantly {\it negative}\ once both types of selection are admitted. Further analysis reveals that the likely beneficial effects of public HI are due to greater coverage for infants at a much lower cost.
    Keywords: Health Insurance, Children, Treatment Effects
    JEL: C21 I12 I18
    Date: 2011–05
  14. By: Chung Tran; Juergen Jung
    Abstract: In this paper we develop a stochastic dynamic general equilibrium overlapping generations (OLG) model with endogenous health capital to study the macroeconomic effects of the Affordable Care Act of March 2010 also known as the Obama health care reform. We find that the insurance mandate enforced with fines and premium subsidies successfully reduces adverse selection in private health insurance markets and subsequently leads to almost universal coverage of the working age population. On other hand, spending on health care services increases by almost 6 percent due to moral hazard of the newly insured. Notably, this increase in health spending is partly financed by the larger pool of insured individuals and by government spending. In order to finance the subsidies the government needs to either introduce a 2.7 percent payroll tax on individuals with incomes over $200, 000, increase the consumption tax rate by about 1.1 percent, or cut government spending about 1 percent of GDP. A stable outcome across all simulated policies is that the reform triggers increases in health capital, decreases in labor supply, and decreases in the capital stock due to crowding out effects and tax distortions. As a consequence steady state output decreases by up to 2 percent. Overall, we find that the reform is socially beneficial as welfare gains are observed for most generations along the transition path to the new long-run equilibrium.
    JEL: H51 I18 I38 E21 E62
    Date: 2011–02
  15. By: Hartmut Lehmann; Jonathan Wadsworth
    Abstract: Using longitudinal data from Ukraine we examine the extent of any long-lasting effects of radiation exposure from the Chernobyl disaster on the health and labour market performance of the adult workforce. The variation in the local area level of radiation fallout from the Chernobyl accident is considered as a random exogenous shock with which to try to establish its causal impact on poor health, labour force participation, hours worked and wages. There appears to be a significant positive association between local area-level radiation dosage and perception of poor health, though much weaker associations between local area-level dosage and other specific self-reported health conditions. There is also some evidence to suggest that those more exposed to Chernobyl-induced radiation have significantly lower levels of labour market performance twenty years on.
    Keywords: Chernobyl, health, labour market performance
    JEL: H00 J00
    Date: 2011–05
  16. By: Sabatini, Fabio
    Abstract: We test the relationship between happiness and self-rated health in Italy. The analysis relies on a unique dataset collected through the administration of a questionnaire to a representative sample (n = 817) of the population of the Italian Province of Trento in March 2011. Based on probit regressions, instrumental variables estimates and structural equations modelling, we find that happiness is strongly correlated with perceived good health, after controlling for a number of relevant socio-economic phenomena. Health inequalities based on income, work status and education are relatively contained in respect to the rest of Italy. As expected, this scales down the role of social capital.
    Keywords: cooperative enterprises; happiness; health; instrumental variables; Italy; life satisfaction; non-profit; social capital; structural equations modelling
    JEL: I12 I31 I18 L31 C35 Z13
    Date: 2011–05–17
  17. By: Papoutsi, Georgia; Drichoutis, Andreas; Nayga, Rodolfo
    Abstract: Childhood obesity rates are rapidly rising in many countries. Since it is highly likely that obesity will persist into adulthood, current rates undermine the health and future of people in developed as well as developing countries. This public health epidemic carries significant economic, social as well as individual-level consequences and has become a research topic of significant interest for various disciplines including economics. We survey the literature in economics and related disciplines associated with the causes of childhood obesity and synthesize the results to provide a better understanding of the explanations for the rising childhood obesity rates. This is an important step in crafting effective policies to combat global childhood obesity trends.
    Keywords: childhood obesity; child health; overweight
    JEL: I18 I10
    Date: 2011–05–19
  18. By: Dhaval M. Dave; Jennifer Tennant; Gregory J. Colman
    Abstract: There is suggestive evidence that rates of major depression have risen markedly in the U.S. concurrent with the rise in obesity. The economic burden of depression, about $100 billion annually, is under-estimated if depression has a positive causal impact on obesity. If depression plays a causal role in increasing the prevalence of obesity, then policy interventions aimed at promoting mental health may also have the indirect benefits of promoting a healthy bodyweight. However, virtually the entire existing literature on the connection between the two conditions has examined merely whether they are significantly correlated, sometimes holding constant a limited set of demographic factors. This study utilizes multiple large-scale nationally-representative datasets to assess whether, and the extent to which, the positive association reflects a causal link from major depression to higher BMI and obesity. While contemporaneous effects are considered, the study primarily focuses on the effects of past and lifetime depression to bypass reverse causality and further assess the role of non-random selection on unobservable factors. There are expectedly no significant or substantial effects of current depression on BMI or overweight/obesity, given that BMI is a stock measure that changes relatively slowly over time. Results are also not supportive of a causal interpretation among males. However, among females, estimates indicate that past or lifetime diagnosis of major depression raises the probability of being overweight or obese by about seven percentage points. Results also suggest that this effect appears to plausibly operate through shifts in food consumption and physical activity. We estimate that this higher risk of overweight and obesity among females could potentially add about 10% (or $9.7 billion) to the estimated economic burden of depression.
    JEL: I1 I12 I18
    Date: 2011–05
  19. By: Guido Cataife; Charles J. Courtemanche
    Abstract: Since Brazil's adoption of a universal health care policy in 1988, the country's health care has been delivered by a mix of private providers and free public providers. We examine whether income-based disparities in medical care usage still exist after the development of the public network using a nationally representative sample of over 46,000 Brazilians from 2003. We find robust evidence of a positive association between income and doctor visits, private doctor visits, and private medical expenditures. Interestingly, we also find a pro-rich disparity in public doctor visits that disappears after including local area fixed effects to account for variation in availability and quality of medical services across localities. We then estimate the income elasticity of private medical expenditures to be well below one, suggesting that private care remains a necessity despite the availability of free public care. These results suggest that the public health care system in Brazil is not effectively reaching the segments of the population that need it most.
    JEL: I0 O12
    Date: 2011–05
  20. By: Axel H. Boersch-Supan; Hendrik Juerges
    Abstract: The aim of this paper is to describe for (West) Germany the historical relationship between health and disability on the one hand and old-age labor force participation or early retirement on the other hand. We explore how both are linked with various pension reforms. To put the historical developments into context, the paper first describes the most salient features and reforms of the pension system since the 1960s. Then we show how mortality, health and labor force participation of the elderly have changed since the 1970. While mortality (as our main measure of health) has continuously decreased and population health improved, labor force participation has also decreased, which is counterintuitive. We then look at a number of specific pension reforms in the 1970s and 1980s and show that increasing or decreasing the generosity of the pension system has had the expected large effects on old-age labor force participation. Finally, we explore the possible link between early childhood environment and early retirement by analyzing the retirement behavior of cohorts born during World War I, a period of harsh living conditions among the civilian population in Germany. Our data show higher early retirement rates among those cohorts, presumably because those cohorts still suffer from worse health on average many decades after their birth.
    JEL: H55 J14
    Date: 2011–05
  21. By: Craig L. Garthwaite
    Abstract: In the United States, public health insurance programs cover over 90 million individuals. Changes in the scope of these programs, such as the Medicaid expansions under the recently passed Patient Protection and Affordable Care Act, may have large effects on physician behavior. This study finds that following the implementation of the State Children’s Health Insurance Program, physicians decreased the number of hours spent with patients, but increased their participation in the expanded program. Suggestive evidence is found that this decrease in hours was a result of shorter office visits. These findings are consistent with the predictions from a mixed-economy model of physician behavior with public and private payers and also provide evidence of crowd out resulting from the creation of SCHIP.
    JEL: H0 H4 I1 I18
    Date: 2011–05
  22. By: Tinh Doan (University of Waikato); John Gibson (University of Waikato); Mark Holmes (University of Waikato)
    Abstract: There is debate about whether microfinance has positive impacts on education and health for borrowing households in developing countries. To provide evidence for this debate we use a new survey designed to meet the conditions for propensity score matching (PSM) and examine the impact of household credit on education and healthcare spending by the poor in peri-urban areas of Ho Chi Minh City, Vietnam. In addition to matching statistically identical non-borrowers with borrowers, our estimates also control for household pre-treatment income and assets, which may be associated with unobservable factors affecting both credit participation and the outcomes of interest. The PSM estimates of binary treatment effect show significant and positive impacts of borrowing on education and healthcare spending. However, multiple ordered treatment effect estimates reveal that only formal credit has significant and positive impacts on education and healthcare spending, while informal credit has insignificant impacts on the spending.
    Keywords: matching; education and healthcare spending; household credit; the poor; peri-urban; Vietnam
    JEL: C14 C21 H81
    Date: 2011–05–23

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