nep-hea New Economics Papers
on Health Economics
Issue of 2012‒07‒01
nine papers chosen by
Yong Yin
SUNY at Buffalo, USA

  1. Transition probabilities and duration analysis among disability states: Some evidence from Spanish data By Guillem López i Casasnovas; Catia Nicodemo
  2. Launching prices for new pharmaceuticals in heavily regulated and subsidized markets By Jaume Puig; Beatriz González López-Valcárcel
  3. The Effect of College Education on Health By Buckles, Kasey; Malamud, Ofer; Morrill, Melinda Sandler; Wozniak, Abigail
  4. Power of the Pill or Power of Abortion? Re-Examining the Effects of Young Women's Access to Reproductive Control By Myers, Caitlin Knowles
  5. Using performance incentives to improve health outcomes By Gertler, Paul; Vermeersch, Christel
  6. The Costs of Avoiding Accidents.Selective Compliance and the 'Peltzman Effect' in Italy By Antonio Nicita; Simona Benedettini
  7. Moral Hazard and Claims Deterrence in Private Disability Insurance By David Autor; Mark Duggan; Jonathan Gruber
  8. Behavioral Economics and the Demand for Alcohol: Results from the NLSY97 By Henry Saffer; Dhaval Dave; Michael Grossman
  9. Using Audit Studies to Test for Physician Induced Demand: The Case of Antibiotic Abuse in China By Janet Currie; Wanchuan Lin; Juanjuan Meng

  1. By: Guillem López i Casasnovas; Catia Nicodemo
    Abstract: In this paper we study the disability transition probabilities (as well as the mortality probabilities) due to concurrent factors to age such as income, gender and education. Although it is well known that ageing and socioeconomic status influence the probability of causing functional disorders, surprisingly little attention has been paid to the combined effect of those factors along the individuals' life and how this affects the transition from one degree of disability to another. The assumption that tomorrow's disability state is only a function of the today's state is very strong, since disability is a complex variable that depends on several other elements than time. This paper contributes into the field in two ways: (1) by attending the distinction between the initial disability level and the process that leads to his course (2) by addressing whether and how education, age and income differentially affect the disability transitions. Using a Markov chain discrete model and a survival analysis, we estimate the probability by year and individual characteristics that changes the state of disability and the duration that it takes its progression in each case. We find that people with an initial state of disability have a higher propensity to change and take less time to transit from different stages. Men do that more frequently than women. Education and income have negative effects on transition. Moreover, we consider the disability benefits associated to those changes along different stages of disability and therefore we offer some clues on the potential savings of preventive actions that may delay or avoid those transitions. On pure cost considerations, preventive programs for improvement show higher benefits than those for preventing deterioration, and in general terms, those focussing individuals below 65 should go first. Finally the trend of disability in Spain seems not to change among years and regional differences are not found.
    Keywords: Markov transition, disability states, cost of disability, Spain, survival analysis
    JEL: J11 I18 H55
    Date: 2012–06
  2. By: Jaume Puig; Beatriz González López-Valcárcel
    Abstract: This paper provides empirical evidence on the explanatory factors affecting introductory prices of new pharmaceuticals in a heavily regulated and highly subsidized market. We collect a data set consisting of all new chemical entities launched in Spain between 1997 and 2005, and model launching prices. We found that, unlike in the US and Sweden, therapeutically "innovative" products are not overpriced relative to "imitative" ones. Price setting is mainly used as a mechanism to adjust for inflation independently of the degree of innovation. The drugs that enter through the centralized EMA approval procedure are overpriced, which may be a consequence of market globalization and international price setting.
    Keywords: pharmaceuticals; price competition; price regulation
    JEL: L11 L65 I10 I18
    Date: 2012–05
  3. By: Buckles, Kasey (University of Notre Dame); Malamud, Ofer (University of Chicago); Morrill, Melinda Sandler (North Carolina State University); Wozniak, Abigail (University of Notre Dame)
    Abstract: We exploit exogenous variation in college completion induced by draft-avoidance behavior during the Vietnam War to examine the impact of college completion on adult mortality. Our preferred estimates imply that increasing college completion rates from the level of the state with the lowest induced rate to the highest would decrease cumulative mortality by 28 percent relative to the mean. Most of the reduction in mortality is from deaths due to cancer and heart disease. We also explore potential mechanisms, including differential earnings, health insurance, and health behaviors, using data from the Census, ACS, and NHIS.
    Keywords: health, college education
    JEL: I12 I23 J24
    Date: 2012–06
  4. By: Myers, Caitlin Knowles (Middlebury College)
    Abstract: Recent research postulating that the diffusion of confidential access to the birth control pill to young women in the United States contributed to the dramatic social changes of the late 1960s and 1970s has not adequately accounted for the largely contemporaneous diffusion of access to abortion. Estimates using a new panel of data on state policies related to access to the pill and abortion indicate that while access to the pill may have played a role in the sexual revolution, it had little effect on the probabilities of entering into marriage and parenthood at a young age. In contrast, both the legalization of abortion and the enactment of laws permitting young unmarried women to consent to it led to substantial delays in marriage and motherhood.
    Keywords: abortion, contraception, fertility, marriage
    JEL: I18 J12 J13
    Date: 2012–06
  5. By: Gertler, Paul; Vermeersch, Christel
    Abstract: This study examines the effect of performance incentives for health care providers to provide more and higher quality care in Rwanda on child health outcomes. The authors find that the incentives had a large and significant effect on the weight-for-age of children 0-11 months and on the height-for-age of children 24-49 months. They attribute this improvement to increases in the use and quality of prenatal and postnatal care. Consistent with theory, They find larger effects of incentives on services where monetary rewards and the marginal return to effort are higher. The also find that incentives reduced the gap between provider knowledge and practice of appropriate clinical procedures by 20 percent, implying a large gain in efficiency. Finally, they find evidence of a strong complementarity between performance incentives and provider skill.
    Keywords: Health Monitoring&Evaluation,Population Policies,Health Systems Development&Reform,Disease Control&Prevention,Adolescent Health
    Date: 2012–06–01
  6. By: Antonio Nicita; Simona Benedettini
    Abstract: We empirically investigate the deterrent and offsetting effects of the introduction of a point–record driving license (PDRL) in Italy. We find that the PDRL resulted in a sharp reduction of seat belt offenses, and in a noticeable decrease of road accidents. However, the reduction in occupant fatalities and injuries was associated with an increase in non-occupant ones, suggesting a remarkable “Peltzman effect”. We then discuss whether a given enforcement design, by inducing drivers to make the best use of safety resources already available to them, may generate more external costs than would otherwise occur.
    Keywords: offsetting behavior, point - record driving license, seat belts, traffic law enforcement, traffic fatalities
    JEL: D02 K32 K42 L51
    Date: 2012–02
  7. By: David Autor; Mark Duggan; Jonathan Gruber
    Abstract: We provide a detailed analysis of the incidence, duration and determinants of claims made on private Long Term Disability (LTD) policies using a database of approximately 10,000 policies and 1 million workers from a major LTD insurer. We document that LTD claims rates are much lower than claims rates on the public analogue to LTD, the Social Security Disability Insurance program, yet LTD policies have a much higher return-to-work rate among initial claimants. Nevertheless, our analysis indicates that the impact of moral hazard on LTD claims is substantial. Using within firm, over time variation in plan parameters, we find that a higher replacement rate and a shorter waiting time to benefits receipt—also known as the Elimination Period or EP—significantly increase the likelihood that workers claim LTD. About sixty percent of the effect of a longer EP is due to censoring of shorter claims, while the remainder is due to deterrence: workers facing a longer EP are less likely to claim benefits for impairments that would lead to a only a brief period of LTD receipt. This deterrence effect is equally large among high and low-income workers, suggesting that moral hazard rather than liquidity underlies the behavioral response. Consistent with this interpretation, the response of LTD claims to plan parameters is driven primarily by the behavior of the healthiest disabled, those who would return to work after receiving LTD.
    JEL: H55 J32
    Date: 2012–06
  8. By: Henry Saffer; Dhaval Dave; Michael Grossman
    Abstract: The behavioral economic model presented in this paper argues that the effect of advertising and price differ by past consumption levels. The model predicts that advertising is more effective in reducing consumption at high past consumption levels but less effective at low past consumption levels. Conversely, the model predicts that higher prices are effective in reducing consumption at low past consumption levels but less effective at high past consumption levels. Unlike the models used in most prior studies, this model predicts that the effects of policy on average consumption and on the upper end of the distribution are different. Both FMM and Quantile models were estimated. The results from these regressions show that heavy drinkers are more responsive to advertising and less responsive to price than are moderate drinkers. The empirical evidence also supports the assumption that education is a proxy for self-regulation. The key conclusions are that restrictions on advertising are targeted at heavy drinkers and are an underutilized alcohol control policy. Higher excise taxes on alcohol reduce consumption by moderate drinkers and are of less importance in reducing heavy consumption.
    JEL: D03 I18
    Date: 2012–06
  9. By: Janet Currie; Wanchuan Lin; Juanjuan Meng
    Abstract: The overuse of medical services including antibiotics is often blamed on Physician Induced Demand. But since this theory is about physician motivations, it is difficult to test. We conduct an audit study in which physician financial incentives, beliefs about what patients want, and desires to reciprocate for a small gift are systematically varied. We find that all of these treatments reduce antibiotics prescriptions, suggesting that antibiotics abuse in China is not driven by patients actively demanding antibiotics, by physicians believing that patients want antibiotics, or by physicians believing that antibiotics are in the best interests of their patients, but is largely driven by financial incentives. Our results also show that physician behavior can be significantly influenced by the receipt of a token gift, such as a pen.
    JEL: I11
    Date: 2012–06

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