nep-hea New Economics Papers
on Health Economics
Issue of 2012‒05‒29
nineteen papers chosen by
Yong Yin
SUNY at Buffalo, USA

  1. Wealth Effects or Economic Barometer: Why Do House Prices Matter for Psychological Health? By Anita Ratcliffe
  2. Smoking, Income and Subjective Well-Being: Evidence from Smoking Bans By Abel Brodeur
  3. The Determinants of Preventive Health Behavior: Literature Review and Research Perspectives By Carolina Werle
  4. Prevention against equality? By Marc Fleurbaey; Grégory Ponthière
  5. Long-Term Care, Altruism and Socialization By Grégory Ponthière
  6. Innovative procedures: the key factor for hospital performance By Laurent Gobillon; Carine Milcent
  7. Measuring Poverty Without The Mortality Paradox By Mathieu Lefebvre; Pierre Pestieau; Grégory Ponthière
  8. Private, social and self insurance for longterm care: a political economy analysis By De Donder, Philippe; Pestieau, Pierre
  9. Income Inequality and Health: Lessons from a Refugee Residential Assignment Program By Grönqvist, Hans; Johansson, Per; Niknami, Susan
  10. Early Interventions and Disability Insurance: Experience from a Field Experiment By Engström, Per; Hägglund, Pathric; Johansson, Per
  11. Cross-border health and productivity effects of alcohol policies By Johansson, Per; Pekkarinen, Tuomas; Verho, Jouko
  12. Is the baby to blame ? an inquiry into the consequences of early childbearing By Azevedo, Joao Pedro; Lopez-Calva, Luis F.; Perova, Elizaveta
  13. The Asset Cost of Poor Health By Poterba, James; Venti, Steven F.; Wise, David Alsgaard
  14. Low birth weight and health expenditures from birth to late adolescence By Michael Hummer; Thomas Lehner; Gerald J. Pruckner
  15. Non-linear relationship between body mass index and labor market outcomes: new evidence from China By Luo, Mi; Zhang, Chuanchuan
  16. Genetic testing with primary prevention and moral hazard By Bardey, David; De Donder, Philippe
  17. Do Public Health Interventions Crowd Out Private Health Investments? Malaria Control Policies in Eritrea By Carneiro, Pedro; Ghebremeskel, Tewolde; Keating, Joseph; Locatelli, Andrea
  18. The Heterogeneity of the Cigarette Price Effect on Body Mass Index By George Wehby; Charles J. Courtemanche
  19. Age-Based Heterogeneity and Pricing Regulation on the Massachusetts Health Insurance Exchange By Keith M. Marzilli Ericson; Amanda Starc

  1. By: Anita Ratcliffe (Department of Economics, The University of Sheffield)
    Abstract: This paper investigates whether house prices are linked to mental health outcomes, and whether this association arises through wealth effects or whether third factors such as area amenities or economic conditions drive both house prices and psychological health. These alternative explanations have contrasting implications for the effect of house prices on the well-being of homeowners and non-homeowners, which are exploited in the empirical analysis. I document a positive association between house prices and the mental health of homeowners and non-homeowners, which is not consistent with wealth effects. Further analysis indicates that house prices matter via a role as an economic barometer.
    Keywords: Psychological health; house prices; wealth; economic conditions
    JEL: I1 D12
    Date: 2012
  2. By: Abel Brodeur (PSE - Paris-Jourdan Sciences Economiques - CNRS : UMR8545 - Ecole des Hautes Etudes en Sciences Sociales (EHESS) - Ecole des Ponts ParisTech - Ecole Normale Supérieure de Paris - ENS Paris - INRA, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris)
    Abstract: This paper provides estimates of the effects of smoking policies on self-reported well-being using US county-level data. Because the bans were implemented at different times, it is possible to exploit these variations to identify the effect on a broad range of outcomes like self-reported well-being. The impact of smoking bans is estimated on those likely to be smokers relatively to others in order to take into account the effect on former, potential and current smokers. Our estimates suggest that the implementation of smoking bans make those who are predicted to be smokers more satisfied with their life. Within-family externalities and time-inconsistent family-utility maximization explain these findings. Additionally, there is evidence that the largest effect of smoking bans is for parents and married couples where the spouse is predicted to smoke.
    Keywords: Smoking policies ; Subjective well-being ; Social interactions ; Behavior
    Date: 2012–02
  3. By: Carolina Werle (MKT - Marketing - Grenoble École de Management (GEM))
    Abstract: People normally know they should follow a few preventive health behaviors in order to have a better and long life: to not smoke, to have a balanced diet low in fat and rich in vegetables and fruits, to exercise regularly, to avoid heavy drinking, to take medical screens for dangerous diseases, to have immunizations and to use seatbelts while driving. But even knowing that these measures can prevent serious future problems, some people do not adopt them. From a managerial and academic standpoint, it is important to understand the factors behind why people develop preventive health behaviors such as those cited above. On one hand, this is a primary question for public health when major diseases could be avoided by such simple actions. In addition, scant attention has been paid to this subject in the marketing literature in France.
    Date: 2011
  4. By: Marc Fleurbaey (Economic Theory Center - Princeton University); Grégory Ponthière (PSE - Paris-Jourdan Sciences Economiques - CNRS : UMR8545 - Ecole des Hautes Etudes en Sciences Sociales (EHESS) - Ecole des Ponts ParisTech - Ecole Normale Supérieure de Paris - ENS Paris - INRA, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris)
    Abstract: Common sense supports prevention policies aimed at improving survival prospects among the population. It is also widely acknowledged that an early death is a serious disadvantage, and that attention should be paid to the compensation of short-lived individuals. This paper re-examines the compatibility of those two concerns: prevention against early death and compensation for early death. We show that, under mild conditions, no social ordering on allocations can satisfy a concern for prevention and a concern for compensation. The reason is that if it is socially desirable to raise the number of survivors through prevention, it must also be, under costly prevention, desirable to deteriorate the living standards of the short-lived. We then explore two approaches to the prevention / compensation dilemma, and study the associated optimal allocation of resources.
    Keywords: Compensation ; Equality ; Longevity ; Mortality ; Prevention
    Date: 2012–03
  5. By: Grégory Ponthière (PSE - Paris-Jourdan Sciences Economiques - CNRS : UMR8545 - Ecole des Hautes Etudes en Sciences Sociales (EHESS) - Ecole des Ponts ParisTech - Ecole Normale Supérieure de Paris - ENS Paris - INRA, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris)
    Abstract: The public provision of long-term care (LTC) can replace family-provided LTC when adults are not sufficiently altruistic towards their elderly parents. But State intervention can also modify the transmission of values and reduce the long-run prevalence of family altruism in the population. That evolutionary effect questions the desirability of the LTC public provision. To characterize the optimal LTC policy, we develop a three-period OLG model where the population is divided into altruistic and non-altruistic agents, and where the transmission of (non) altruism takes place through a socialization process à la Bisin and Verdier (2001). The optimal short-run and long-run LTC policies are shown to differ, to an extent varying with the particular socialization mechanism at work.
    Keywords: long-term care ; altruism ; socialization ; optimal policy ; crowding out effect
    Date: 2011–09
  6. By: Laurent Gobillon (INED - Institut National d'Etudes Démographiques Paris - INED, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris, PSE - Paris-Jourdan Sciences Economiques - CNRS : UMR8545 - Ecole des Hautes Etudes en Sciences Sociales (EHESS) - Ecole des Ponts ParisTech - Ecole Normale Supérieure de Paris - ENS Paris - INRA, CEPR - Center for Economic Policy Research - CEPR, CREST - Centre de Recherche en Économie et Statistique - INSEE - École Nationale de la Statistique et de l'Administration Économique); Carine Milcent (EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris, PSE - Paris-Jourdan Sciences Economiques - CNRS : UMR8545 - Ecole des Hautes Etudes en Sciences Sociales (EHESS) - Ecole des Ponts ParisTech - Ecole Normale Supérieure de Paris - ENS Paris - INRA)
    Abstract: The role of innovative procedures in the mortality differences between university, non-teaching public and for-profit hospitals is investigated using a French exhaustive administrative dataset on patients admitted for heart attack. Mortality is roughly similar in the three types of hospitals after controlling for case-mix. For-profit hospitals treat the at-risk oldest patients more often with innovative procedures. Therefore, additionnally controlling for innovative procedures makes them having the highest mortality rate. Non-teaching public hospitals end up having the lowest mortality rate.
    Keywords: Hospital performance ; Innovative procedures ; Stratified duration model
    Date: 2011–12
  7. By: Mathieu Lefebvre (CREPP - Center of Research in Public Economics and Population Economics - Université de Liège); Pierre Pestieau (CREPP - Center of Research in Public Economics and Population Economics - Université de Liège, PSE - Paris-Jourdan Sciences Economiques - CNRS : UMR8545 - Ecole des Hautes Etudes en Sciences Sociales (EHESS) - Ecole des Ponts ParisTech - Ecole Normale Supérieure de Paris - ENS Paris - INRA, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris, CORE - Center of Operation Research and Econometrics [Louvain] - Université Catholique de Louvain, CEPR - Center for Economic Policy Research - CEPR); Grégory Ponthière (PSE - Paris-Jourdan Sciences Economiques - CNRS : UMR8545 - Ecole des Hautes Etudes en Sciences Sociales (EHESS) - Ecole des Ponts ParisTech - Ecole Normale Supérieure de Paris - ENS Paris - INRA, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris)
    Abstract: Under income-differentiated mortality, poverty measures reflect not only the "true" poverty, but, also, the interferences or noise caused by the survival process at work. Such interferences lead to the Mortality Paradox: the worse the survival conditions of the poor are, the lower the measured poverty is. We examine several solutions to avoid that paradox. We identify conditions under which the extension, by means of a fictitious income, of lifetime income profiles of the prematurely dead neutralizes the noise due to differential mortality. Then, to account not only for the "missing" poor, but, also, for the "hidden" poverty (premature death), we use, as a fictitious income, the welfare-neutral income, making indifferent between life continuation and death. The robustness of poverty measures to the extension technique is illustrated with regional Belgian data.
    Keywords: premature mortality ; income-differentiated mortality ; poverty measurement ; censored income profile
    Date: 2011–09
  8. By: De Donder, Philippe (Toulouse School of Economics (GREMAQ-CNRS and IDEI)); Pestieau, Pierre
    Abstract: We analyze the determinants of the demand for social, private and self-insurance for long-term care in an environment where agents di¤er in income, probability of becoming dependent and of receiving family help. Uniform social benefits are financed with a proportional income tax and are thus redistributive, while private insurance is actuarially fair. We obtain a rich pattern of insights, depending on whether private insurance is available or not, on its loading factor, and on the correlation between, on the one hand, income and risk, and, on the other hand, income and family help. Although the availability of private insurance decreases the demand for social insurance, it only a¤ects a minority of agents so that the majority-chosen social insurance level remains una¤ected. Family support crowds out the demand for both private and social insurance, and may even suppress any demand for private insurance. Family help crowds out self-insurance only for agents whose demand for both social and private insurance is nil. A general increase in the probability of becoming dependent need not increase the demand for social insurance, since it decreases its return.
    Keywords: long-term care, social insurance, family help, correlation between risk and income, voting.
    JEL: H24 H31 H42 I11
    Date: 2011–12
  9. By: Grönqvist, Hans (SOFI, Stockholm University); Johansson, Per (IFAU); Niknami, Susan (SOFI, Stockholm University)
    Abstract: This paper examines the effect of income inequality on health for a group of particularly disadvantaged individuals: refugees. Our analysis draws on longitudinal hospitalization records coupled with a settlement policy where Swedish authorities assigned newly arrived refugees to their first area of residence. The policy was implemented in a way that provides a source of plausibly random variation in initial location. The results reveal no statistically significant effect of income inequality on the risk of being hospitalized. This finding holds also for most population subgroups and when separating between different types of diagnoses. Our estimates are precise enough to rule out large effects of income inequality on health.
    Keywords: income inequality, immigration, quasi-experiment
    JEL: I10 J15
    Date: 2012–05
  10. By: Engström, Per (Uppsala University); Hägglund, Pathric (SOFI, Stockholm University); Johansson, Per (IFAU)
    Abstract: This paper estimates the effects of early interventions in the Swedish sickness insurance system. The aim of the interventions is to screen and, further to, rehabilitate sick listed individuals. We find that the early interventions – in contrast to what is expected – increase the inflow into disability benefits by around 20 percent. In order to explain the results, we develop a simple theoretical model based on asymmetric information of the health status. The model predicts that the treatment effect is larger for individuals with low incentives to return to work. In order to test this prediction we estimate effects for sick listed employed and unemployed separately. Consistent with the model's prediction, we find that the effect is larger for the unemployed than for the employed.
    Keywords: monitoring, screening, vocation rehabilitation, disability insurance, sickness insurances, unemployment insurance, randomized experiment
    JEL: C93 H51 H55 I18 J22
    Date: 2012–05
  11. By: Johansson, Per (IFAU - Institute for Evaluation of Labour Market and Education Policy); Pekkarinen, Tuomas (Aalto University School of Economics); Verho, Jouko (The Social Insurance Institution of Finland)
    Abstract: This paper studies the cross-border health and productivity effects of alcohol taxes. We estimate the effect of a large cut in the Finnish alcohol tax on mortality, alcohol related illnesses and work absenteeism in Sweden. This tax cut led to large differences in the prices of alcoholic beverages between these two countries and to a considerable increase in cross-border shopping. The effect is identified using differences-in-differences strategy where changes in these outcomes in regions near the Finnish border are compared to changes in other parts of northern Sweden. We use register data where micro level data on deaths, hospitalisations and absenteeism is merged to population-wide micro data on demographics and labour market outcomes. Our results on the effect of the Finnish tax cut on mortality and alcohol-related hospitalisations in Sweden are very imprecise. However,we find that workplace absenteeism increased by 5% for males and by 13% for females near the Finnish border as a result of the tax cut.
    Keywords: Cross-border shopping; Alcohol taxes; Health effects of alcohol
    JEL: H23 H73 I18
    Date: 2012–05–02
  12. By: Azevedo, Joao Pedro; Lopez-Calva, Luis F.; Perova, Elizaveta
    Abstract: Teenage pregnancy has been a cause of concern for policy makers because it is associated with a complex and often adverse social context for women. It is seen as the cause of lower social and economic achievement for mothers and their children, and as the potential determinant of inter-generational poverty traps. However, the question of whether pregnancy -- and the subsequent rearing of a child -- is actually the trigger of poverty, higher dependence on social welfare and/ or other undesirable social and economic consequences has not been studied in developing countries with enough rigor to establish a causal relation. This paper follows a methodology previously applied in the United States, using Mexican data from the National Survey of Demographic Dynamics, to exploit information about miscarriages as an instrument to identify the long-term consequences of early child bearing. Thus, the paper takes the advantage of a natural experiment: it compares the outcomes of women who became pregnant in adolescence, and gave birth, to outcomes of women who became pregnant in adolescence and miscarried. This approach only allows for estimating the costs of adolescent childbearing for teenagers in a risk group, that is, teenagers who are likely to experience a pregnancy. The results are consistent with findings in the United States, suggesting that, contrary to popular thinking, adolescent childbearing does not hamper significantly the lifelong opportunities of the young mothers. Actually, women who gave birth during their adolescence have on average 0.34 more years of education, and are 21 percentage points more likely to be employed, compared with their counterparts who miscarried. The results also suggest, however, greater dependence on social welfare among women who gave birth during adolescence: their social assistance income is 36 percent higher, and they are more likely to participate in social programs, especially the conditional cash transfer program Oportunidades.
    Keywords: Population Policies,Adolescent Health,Gender and Health,Gender and Law,Reproductive Health
    Date: 2012–05–01
  13. By: Poterba, James; Venti, Steven F.; Wise, David Alsgaard
    Abstract: This paper examines the correlation between poor health and asset accumulation for households in the first nine waves of the Health and Retirement Survey. Rather than enumerating the specific costs of poor health, such as out of pocket medical expenses or lost earnings, we estimate how the evolution of household assets is related to poor health. We construct a simple measure of health status based on the first principal component of HRS survey responses on self-reported health status, diagnoses, ADLs, IADL, and other indicators of underlying health. Our estimates suggest large and substantively important correlations between poor health and asset accumulation. We compare persons in each 1992 asset quintile who were in the top third of the 1992 distribution of latent health with those in the same 1992 asset quintile who were in the bottom third of the latent health distribution. By 2008, those in the top third of the health distribution had accumulated, on average, more than 50 percent more assets than those in the bottom third of the health distribution. This “asset cost of poor health†appears to be larger for persons with substantial 1992 asset balances than for those with lower balances.
    Date: 2011
  14. By: Michael Hummer; Thomas Lehner (Department of Economics, Johannes Kepler University Linz, Austria); Gerald J. Pruckner
    Abstract: Using administrative panel data of health insurants, we estimate the effects of low birth weight on health service utilization among children and young adults between birth and 21 years old. To account for time-invariant heterogeneity of mothers, we use sibling fixed- effects estimation. We find that low birth weight strongly increases subsequent health expenditures and that the effect is particularly pronounced in the first year of life. Starting in compulsory schooling, we observe a shift in expenditures to mental-health problems. Whereas the effects on physical health disappear over time, we provide evidence that mental-health problems prevail until early adulthood. We therefore suggest a screening program tailored to the conditions more likely to be contracted by low-birth-weight children in order to mitigate the negative health consequences.
    Keywords: Low birth weight, health expenditures, sibling fixed-effects
    JEL: I10 I12 I18
    Date: 2012–05
  15. By: Luo, Mi; Zhang, Chuanchuan
    Abstract: Using data from a most recent national household survey in China, we provide new evidence for the relationship between body mass index (BMI) and labor market attainments. In contrast to previous studies, we find a non-linear relationship between BMI and employment / wages, especially for women. There is no substantial heterogeneity across occupation in the effect of BMI on women’s wages.
    Keywords: Body mass index; Unemployment; Wage; Non-linear correlation
    JEL: J31 I12 J64
    Date: 2011–12
  16. By: Bardey, David; De Donder, Philippe
    Abstract: We develop a model where a genetic test reveals whether an individual has a low or high probability of developing a disease. A costly prevention effort allows high-risk agents to decrease this probability. Agents are not obliged to take the test, but must disclose its results to insurers, and taking the test is associated to a discrimination risk. We study the individual decisions to take the test and to undertake the prevention effort as a function of the effort cost and of its efficiency. If effort is observable by insurers, agents undertake the test only if the effort cost is neither too large nor too low. If the effort cost is not observable by insurers, moral hazard increases the value of the test if the effort cost is low. We offer several policy recommendations, from the optimal breadth of the tests to policies to do away with the discrimination risk.
    Keywords: discrimination risk; informational value of test; personalized medecine
    JEL: D82 I18
    Date: 2012–05
  17. By: Carneiro, Pedro; Ghebremeskel, Tewolde; Keating, Joseph; Locatelli, Andrea
    Abstract: It is often argued that engaging in indoor residual spraying (IRS) in areas with high coverage of mosquito bed nets may discourage net ownership and use. This is just a case of a public program inducing perverse incentives. We analyze new data from a randomized control trial conducted in Eritrea which surprisingly shows the opposite: IRS encouraged net acquisition and use. Our evidence points to the role of imperfect information. The introduction of IRS may have made the problem of malaria more salient, leading to a change in beliefs about its importance and to an increase in private health investments.
    Keywords: Crowding-Out; Development; Health; Malaria
    JEL: I10
    Date: 2012–05
  18. By: George Wehby; Charles J. Courtemanche
    Abstract: Previous studies estimate the average effect of cigarette price on body mass index (BMI), with recent research showing that their different methodologies all point to a negative effect after several years. This literature, however, ignores the possibility that the effect could vary throughout the BMI distribution or across socioeconomic and demographic groups due to differences in underlying preferences for health or risks for obesity. We evaluate heterogeneity in the long-run impact of cigarette price on BMI by performing quantile regressions and stratifying the sample by race, education, age, and sex. Cigarette price has a highly heterogeneous negative effect that is more than three times as strong at high BMI levels – where weight loss is most beneficial for health – than at low levels. The effects are also strongest for blacks, college graduates, middle-aged adults, and women. We also assess the implications for disparities, conduct robustness checks, and evaluate potential mechanisms.
    JEL: I10
    Date: 2012–05
  19. By: Keith M. Marzilli Ericson; Amanda Starc
    Abstract: Little is known about consumer behavior or insurer incentives in health insurance exchanges. We analyze choice on the Massachusetts exchange, using coarse insurer pricing strategies to identify price sensitivity. We find substantial age-based heterogeneity: younger individuals are more than twice as price sensitive as older individuals. Modified community rating regulations interact with price discrimination, as our results imply higher markups on older consumers. Age-based pricing regulations would bind even conditional on perfect risk adjustment, highlighting the importance of considering insurer incentives when regulating insurance markets. Changes in age-based pricing regulation can result in transfers of 8% of the purchase price.
    JEL: I11
    Date: 2012–05

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