nep-hea New Economics Papers
on Health Economics
Issue of 2012‒09‒03
twenty-one papers chosen by
Yong Yin
SUNY at Buffalo, USA

  1. Born to Be Wide? Exploring Correlations in Mother and Adolescent Body Mass Index Using Data from the British Household Panel Survey By Heather Brown; Jennifer Roberts
  2. Trade Union Membership and Sickness Absence: Evidence from a Sick Pay Reform By Laszlo Goerke; Markus Pannenberg
  3. Impact of climate related shocks on child's health in Burkina Faso By Catherine Araujo Bonjean; Stéphanie Brunelin; Catherine Simonet
  4. Mandatory Quality Disclosure and Quality Supply: Evidence from German Hospitals By Lapo Filistrucchi; Fatih Cemil Ozbugday
  5. Do Socioeconomic Factors Really Explain Income-Related Inequalities in Health? Applying a Twin Design to Standard Decomposition Analysis By Gerdtham, Ulf-G; Lundborg, Petter; Lyttkens, Carl Hampus; Nystedt, Paul
  6. Parallel imports of hospital pharmaceuticals: An empirical analysis of price effects from parallel imports and the design of procurement procedures in the Danish hospital sector By Hostenkamp, Gisela; Kronborg, Christian; Arendt, Jacob Nielsen
  7. Does Retirement Age Impact Mortality? By Hernaes, Erik; Markussen, Simen; Piggott, John; Vestad, Ola
  8. Cannabis Use and Suicidal Ideation By Ours, J.C. van; Williams, J.E.; Fergusson, D.; Horwood, L.J.
  9. The impact of development aid on education and health: Survey and new evidence from dynamic models By Ziesemer, Thomas
  10. Determinants of the prevalence of diarrhoea in adolescents attending school: A case study of an Indian village school By Ramani, Shyama V.; Frühauf, Timothée; Dutta, Arijita; Meijers, Huub
  11. Inequity in the Face of Death By Pilar Garcia-Gomez; Erik Schokkaert; Tom Van Ourti; Teresa Bago d’Uva
  12. Hospital market concentration and discrimination of patients By Dewenter, Ralf; Jaschinski, Thomas; Kuchinke, Björn A.
  13. Health Expenditures Risk, Purchase of Private Health Insurance, and Precautionary Saving in Turkey By Evren Ceritoglu
  14. "Payment Mechanisms in the Healthcare Industry: An Experimental Study of Physician Incentives in a Multiple Principal Agent Setting" By Ellen P. Green
  15. Swine influenza and vaccines: an alternative approach for decision making about pandemic prevention By Marcello Basili; Silvia Ferrini; Emanuele Montomoli
  16. Coordinating Healthcare and Pension Policies: An Exploratory Study By Bali, Azad Singh; Asher, Mukul G.
  17. The effectiveness of government expenditure on education and health care in the Caribbean By Craigwell, Roland; Lowe, Shane; Bynoe, Danielle
  18. The Impact of a Public Option in the Health Insurance Market By Barbos, Andrei; Deng, Yi
  19. Smokers’ Preference for Divorce and Extramarital Sex By Yamamura, Eiji
  20. The Impact of Physical Education on Obesity among Elementary School Children By John Cawley; David Frisvold; Chad Meyerhoefer
  21. Temperature, Human Health, and Adaptation: A Review of the Empirical Literature By Olivier Deschenes

  1. By: Heather Brown (Institute of Health and Society, Newcastle University); Jennifer Roberts (Department of Economics, The University of Sheffield)
    Abstract: The channels contributing to the intergenerational correlation in body mass are not well understood. Decomposition analysis is used to estimate the contribution of maternal characteristics, household income, and adolescent behaviours related to eating and physical activity on the intergenerational correlation in BMI. The analysis uses data on mothers and their adolescent children aged 11 to 15 from the British Household Panel Survey (2004 and 2006). The overall intergenerational correlation in BMI is 0.25. Maternal educational attainment and adolescent participation in some form of physical activity on a daily basis are the largest contributing factors to the intergenerational correlation in BMI. Maternal employment and more than four hours a day of television viewing by the adolescent are also important contributing factors. Overall, observable characteristics explain 11.2% of the intergenerational correlation in BMI.
    Keywords: body mass index; restricted maximum likelihood; intergenerational correlation
    JEL: D10
    Date: 2012
  2. By: Laszlo Goerke; Markus Pannenberg
    Abstract: In 1996, statutory sick pay was reduced for private sector workers in Germany. Using the empirical observation that trade union members are dismissed less often than non-members, we construct a model to predict how absence behaviour will respond to the sick pay reform. We show that union members may have stronger incentives to be absent and to react to the cut in sick pay. In the empirical investigation, we find a positive relationship between trade union membership and absence due to sickness and observe more pronounced reactions to the cut in sick pay among union members than among non-members. These findings suggest that more flexibility in the use of paid absence due to sickness constitutes a private gain from trade union membership.
    Keywords: Difference-in-differences, sickness-related absence, Socio-Economic Panel (SOEP), statutory sick pay, trade union membership
    JEL: I18 J51 J22
    Date: 2012
  3. By: Catherine Araujo Bonjean (CERDI - Centre d'études et de recherches sur le developpement international - CNRS : UMR6587 - Université d'Auvergne - Clermont-Ferrand I); Stéphanie Brunelin (CERDI - Centre d'études et de recherches sur le developpement international - CNRS : UMR6587 - Université d'Auvergne - Clermont-Ferrand I); Catherine Simonet (CERDI - Centre d'études et de recherches sur le developpement international - CNRS : UMR6587 - Université d'Auvergne - Clermont-Ferrand I)
    Abstract: The aim of this paper is to estimate the impact of weather related income shocks on child health in rural Burkina Faso where rain fed agriculture is the dominant production system. We combine health data originating from the 2008 household survey with meteorological data to define shocks at the child level. We first estimate the marginal effect of rainfall at various ages on the child's health in order to identify the critical period during which deprivation has the most severe consequences. Then we look for a different impact of shocks on girls and boys that would reflect a gender bias in intra household resource allocation. We also assess the household ability to smooth consumption by testing for an asymmetric effect of rainfall shocks according to their size and by testing the impact of shocks according to household endowments. Results evidence a strong relationship between rainfall shocks during the prenatal period and child health. Households are not able to dampen small but negative rainfall shocks. Unexpectedly, girls are less severely affected by shocks than boys. The robustness of results is tested by using the sibling and difference-in-differences estimators as well as placebo regressions.
    Keywords: Child health;rainfall shock;burkina faso;sibling estimator;treatment-effect model
    Date: 2012–08–24
  4. By: Lapo Filistrucchi (Università degli Studi di Firenze,); Fatih Cemil Ozbugday
    Abstract: Using a newly constructed dataset on German hospitals, which includes 24 process and outcome indicators of clinical quality, we test whether quality has increased in various clinical areas since the introduction of mandatory quality reports and the online publication of part of the collected quality measures. Our results suggest that process indicators of clinical quality have increased significantly in 2008 compared to 2006. In addition, the hospitals underperforming in 2006 appear to have increased their clinical quality relatively more than the other hospitals. When instead quality is measured by outcome indicators, average clinical quality is estimated to have increased for underperforming hospitals and decreased for the best performing hospitals in 2006, so that on average across all hospitals the changes in outcome indicators are insignificant for just more than half of the outcome quality measures. We further show that the best performing hospitals in 2006 in terms of outcome quality measures experienced an increase in their share of patients in 2008, thus providing indirect evidence that patients react to disclosed quality. Interestingly, the best performing hospitals in 2006 in terms of process quality measures did not experience a significant change in their share of patients in 2008, thus suggesting that patients react more to output than to process measures of quality. Finally, for the subset of hospitals who offer services in obstetrics, we find that higher competitive pressure, measured as the number of competitors in a given radius, is associated with a higher increase in quality following quality disclosure. We argue that the latter effect is unlikely to be due to selection of patients by hospitals.
    Keywords: health care; hospitals; quality disclosure; quality competition; Germany
    JEL: I11 L41 L44 C23
    Date: 2012
  5. By: Gerdtham, Ulf-G (Department of Economics, Lund University); Lundborg, Petter (Department of Economics, Lund University); Lyttkens, Carl Hampus (Department of Economics, Lund University); Nystedt, Paul (Department of Economics, Lund University)
    Abstract: The concentration index and decomposition analysis are commonly used in economics to measure and explain socioeconomic inequalities in health. Such analysis builds on the strong assumption that a health production function can be estimated without substantial bias implying that health is caused by socioeconomic outcomes, which is hard to prove. This article contributes to the decomposition literature by applying a twin design to standard decomposition analysis of socioeconomic health inequalities in Sweden. The twin-based decomposition estimates, which control for unobserved endowments at the twin-pair level, are much lower in magnitude than estimates obtained via typical OLS on the same sample. This demonstrates that OLS-based decompositions are severely upward biased due to underlying confounders, exaggerating the contribution of income and education to health inequality, which in turn limits the usefulness of such decompositions for policy purposes.
    Keywords: Causality; Health Inequality; Health; Socioeconomic; Income; Twins
    JEL: I10 I12 I14
    Date: 2012–08–20
  6. By: Hostenkamp, Gisela (COHERE); Kronborg, Christian (COHERE); Arendt, Jacob Nielsen (Danish Institute of Governmantal Research)
    Abstract: We analyse pharmaceutical imports in the Danish hospital sector. In this market medicines are publicly tendered using first-price sealed-bid procurement auctions. We analyse whether parallel imports have an effect on pharmaceutical prices and whether the way tenders were organised matters for the competitive effect of parallel imports on prices. Our theoretical analysis shows that the design of the procurement rules affects both market structure and pharmaceutical prices. Parallel imports may induce price competition for patented medicines if tenders are organised in a first-price sealed–bid format. In addition splitting a national supply contract into several regional tenders increases parallel importers’ incentives to enter the market, but decrease original producers’ incentives to engage in price competition so that their net effect on pharmaceutical prices needs to be established empirically. We exploit a unique panel dataset containing contract prices of hospital medicines in Denmark between 2005 and 2009 to empirically analyse the effect of parallel imports on pharmaceutical prices and the role of the procurement rules for attracting parallel imports. Controlling for unobservable product characteristics using fixed effect estimation, parallel imports appear to have decreased pharmaceutical prices, but their effect on prices is smaller in regional tenders. Our results also support the conjecture that regional tenders increase parallel importers’ propensity to participate in the bidding process. Our results imply that the design of the procurement rules affect parallel importers’ propensity to participate in the bidding process and that centralising pharmaceutical procurement may not always lead to lower prices than decentralised regional procurement.
    Keywords: Parallel imports; hospital pharmaceuticals; procurement auctions; Denmark
    JEL: D44 I11 K23
    Date: 2012–08–27
  7. By: Hernaes, Erik (Ragnar Frisch Centre for Economic Research); Markussen, Simen (Ragnar Frisch Centre for Economic Research); Piggott, John (ARC Centre of Excellence in Population Ageing Research); Vestad, Ola (Ragnar Frisch Centre for Economic Research)
    Abstract: This paper studies the relationship between retirement and mortality, using a unique administrative data set covering the full population of Norway. We make use of a series of retirement policy changes in Norway, which reduced the retirement age for a group of workers but not for others. By employing a difference-in-differences framework based on monthly birth cohort and treatment group status we first establish that the early retirement program significantly reduced the retirement age – this remains true when we account for program substitution, for example into the disability pension. Using instrumental variables estimation we find that retirement age has no effect on mortality.
    Keywords: Retirement age; Mortality; Instrumental variables; Policy evaluation
    JEL: H55 I10 J11 J26
    Date: 2012–06–11
  8. By: Ours, J.C. van; Williams, J.E.; Fergusson, D.; Horwood, L.J. (Tilburg University, Center for Economic Research)
    Date: 2012
  9. By: Ziesemer, Thomas (UNU-MERIT/MGSoG, and School of Business and Economics, Maastricht University)
    Abstract: We investigate the impact of aggregate aid, earmarked aid, committed or disbursed, on social indicators in health and education. A literature review shows that for earmarked aid use of commitment data mostly leads to insignificant results; use of disbursement data mostly leads to significantly favourable results; panel data models including lagged dependent variables lead to significantly favourable results for at least one form of aid unless only commitment data are used. In our own analysis of effects of aggregate aid per capita on life expectancy and literacy we find from detailed analysis of lag structures that the data for literacy and life expectancy in dynamic panel data models should be taken in the form of growth rates. Growth rates of aid per capita are shown to have significantly favourable effects on the growth rates life expectancy. Growth rates or levels of aid per capita may reduce growth rates of illiteracy in system GMM estimates.
    Keywords: Development Aid, Education, Health, Dynamic Panel Data Model
    JEL: F35 I15 I25
    Date: 2012
  10. By: Ramani, Shyama V. (UNU-MERIT/MGSoG); Frühauf, Timothée (Johns Hopkins Bloomberg School of Public Health); Dutta, Arijita (Department of Economics, University of Calcutta); Meijers, Huub (UNU-MERIT/MGSoG, and School of Business and Economics, Maastricht University)
    Abstract: In developing countries, including India, diarrhoea is a leading killer throughout the age pyramid. However, most of the medical literature on the determinants of diarrhoea focuses only on young children or the elderly, with health policy mainly targeting the former. Thus, the present article attempts to contribute to a better understanding of the determinants of diarrhoea in adolescents - the understudied population. The paper develops a model using the medical literature, refines it to fit an Indian village context and tests the hypotheses identified through administering a questionnaire to 114 adolescents in an Indian village school. Results confirm the well known importance of household sanitation. In addition, the contribution of the present study is to assert that access to school toilets and usage of school toilets are also crucial. Furthermore, usage of toilets at school varies as a function of gender and the existence of a toilet in the student's household. Finally, the installation of toilets in schools is not enough, sustainable financial models must be found to maintain toilets and induce students to use them.
    Keywords: diarrhoea, adolescents, India, sanitation, school
    JEL: I15 I25 O29
    Date: 2012
  11. By: Pilar Garcia-Gomez (Erasmus University Rotterdam); Erik Schokkaert (Universite Cath. de Louvain); Tom Van Ourti (Erasmus University Rotterdam); Teresa Bago d’Uva (Erasmus University Rotterdam)
    Abstract: We apply the theory of inequality in opportunity to measure inequity in mortality. Our empirical work is based on a rich dataset for the Netherlands (1998-2007), linking information about mortality, health events and lifestyles. We show that distinguishing between different channels via which mortality is affected is necessary to test the sensitivity of the results with respect to different normative positions. Moreover, our model allows for a comparison of the inequity in simulated counterfactual situations, including an evaluation of policy measures. We explicitly make a distinction between inequity in mortality risks and inequity in mortality outcomes. The treatment of this difference - “luck”- has a crucial in‡uence on the results.
    Keywords: equity; equality of opportunities; mortality; lifestyles
    JEL: D63 I12 I14
    Date: 2012–08–20
  12. By: Dewenter, Ralf; Jaschinski, Thomas; Kuchinke, Björn A.
    Abstract: In this paper we investigate the existence of a two-tier medical system in the German acute care hospital sector using data from a survey of 483 German hospitals. The focus of our analysis lies on the impact of hospital concentration on the probability of discrimination of patients with different health insurances in regard to the access to medical services. Accounting for a possible endogeneity of market structure, we find that hospitals in highly concentrated markets are less likely to pursue any differentiation among prospective patients with different health insurances. We ascribe this finding to competitive pressure in less concentrated markets. Hospitals in competitive markets are more obliged to steal business from rival hospitals by privileging profitable patients than hospitals in highly concentrated markets. --
    Keywords: Hospital markets,Patients' discrimination,Survey data
    JEL: I1 I11 L1 L19 L22
    Date: 2012
  13. By: Evren Ceritoglu
    Abstract: The precautionary saving hypothesis proposes that purchase of private health insurance diminishes household saving, since health insurance coverage decreases the possibility of unexpected out-of-pocket health expenditures. The empirical analysis is realised using the TURKSTAT Household Budget Surveys between 2003 and 2010 for the Turkish economy for this purpose. The econometric results from the Two-Stage Probit Least Squares (2SPLS) regressions indicate that there is a negative and statistically significant relationship between household saving and voluntary health insurance, which includes purchases of private health insurance. Moreover, the relationship between household saving and green-card ownership, which is distributed to the poorest individuals without social security coverage, is negative and statistically significant. As a result, the empirical analysis provides evidence in favour of the precautionary saving hypothesis.
    Keywords: health expenditures risk, precautionary saving
    JEL: D12 I11
    Date: 2012
  14. By: Ellen P. Green (Department of Economics, University of Delaware)
    Abstract: Current failures in the healthcare industry emphasize the need for a more fundamental understanding of how these contracts incentivize doctors. To aid this understanding, we treat the established physician-client-employer relationship as a multiple principal agent problem. We use a laboratory experiment, with a real-effort task, to test the relative performance of common payment mechanisms employed in this dual-principal agent relationship (Piece Rate, Flat Rate, Salary, Bonus, and Socialization). This study suggests, contrary to standard contract theory, that relying on extrinsic incentives to motivate physicians may be detrimental and costly for the healthcare industry.
    Keywords: Multiple principal agent theory, intrinsic motivation, other-regarding behavior, Fee-For-Service, Capitation, Salary
    JEL: I10 I12 I18 J01 J3 L2
    Date: 2012
  15. By: Marcello Basili; Silvia Ferrini; Emanuele Montomoli
    Abstract: Background: During the global pandemic of N1H1 (2009) influenza, many Governments signed contracts with vaccine producers for a universal influenza immunization program and bought hundreds of millions of vaccines doses. We argue that, as Health Ministers assumed the occurrence of the worst possible scenario (generalized pandemic influenza) and followed the strong version of the Precautionary Principle, they undervalued the possibility of mild or weak pandemic wave.Methodology: An alternative decision rule, based on the non-extensive entropy principle, is introduced and a different Precautionary Principle characterization is applied. This approach values extreme negative results (catastrophic events) in a different way than ordinary results (more plausible and mild events), and introduces less pessimistic forecasts in the case of uncertain influenza pandemic outbreaks. A simplified application is presented through an example based on seasonal data of morbidity and severity among Italian children influenza-like illness for the period 2003-2010.Principal Findings: Compared to a pessimistic forecast by experts, who predict an average attack rate of 15% for the next pandemic influenza, we demonstrate that, using the non-extensive maximum entropy principle, a less pessimistic outcome is predicted with a 20% savings in public funding for vaccines doses.Conclusions: The need for an effective influenza pandemic prevention program, coupled with an efficient use of public funding, calls for a rethinking of the Precautionary Principle. The non-extensive maximum entropy principle, which incorporates vague and incomplete information available to decision makers, produces a more coherent forecast of possible influenza pandemic and a conservative spending in public funding.
    JEL: I15 I28
    Date: 2012–07
  16. By: Bali, Azad Singh (Asian Development Bank Institute); Asher, Mukul G. (Asian Development Bank Institute)
    Abstract: Rapid ageing of the population globally represents an unprecedented historical trend. As pension and healthcare costs are positively correlated with rising incomes, ageing, urbanization, and a shift from communicable to life-style diseases, managing these costs is a major challenge. There are many linkages between healthcare and pension arrangements—in terms of costs, exposure to risks, and as they jointly impact on crucial policy decisions. This paper discusses the rationale for coordination between various programs to better manage the cost of ageing. The current difficult macroeconomic environment, including fiscal stringency conditions, strengthens the case for such coordination.
    Keywords: population ageing; pension policies; healthcare policies; urbanization
    JEL: J10 J40
    Date: 2012–08–16
  17. By: Craigwell, Roland; Lowe, Shane; Bynoe, Danielle
    Abstract: Investment in human development is considered a means of improving the quality of life and sustaining economic growth in the Caribbean. The purpose of this paper is to assess the efficacy of public spending on health care and education by evaluating the life expectancy and school enrolment rates of these countries.
    Keywords: Caribbean; Government policy; Public finance; Public spending; Education; Health care; Panel OLS
    JEL: I21 I00
    Date: 2012
  18. By: Barbos, Andrei; Deng, Yi
    Abstract: We develop a game-theoretical model to examine the implications of the introduction of a non-profit "public option" in the U.S. health insurance market, in which a continuum of heterogeneous consumers, each facing unknown medical expenditures and differing in their expectations of such expenditures, have to choose between a profit-maximizing private insurance plan and a social-welfare-maximizing public plan. We then estimate and calibrate the model based on the U.S. data and quantify the Nash equilibrium of the market structure. Empirical results suggest that private insurer will still represent a significant part of the insurance market and generate a substantially positive profit.
    Keywords: Public Option; Health Insurance Markets
    JEL: I11 L32 L21 L10
    Date: 2012–06–15
  19. By: Yamamura, Eiji
    Abstract: Smokers are more impatient and, unlike nonsmokers, they tend to prefer current benefits. In this paper, individual-level data from Japan are used to examine how preferences for divorce and extramarital sex are different between smokers and nonsmokers. After controlling for various individual characteristics, the major findings are as follows: (1) smokers are more likely to have a positive view about divorce than nonsmokers; (2) smokers are more likely to have a positive view about extramarital sex than nonsmokers. These results were observed regardless of the individual’s marital status. The findings here about smoker’s preferences are consistent with the characteristics of smokers suggested in the literature.
    Keywords: smokers; divorce; extramarital sex
    JEL: I12 J12
    Date: 2012–08–20
  20. By: John Cawley; David Frisvold; Chad Meyerhoefer
    Abstract: In response to the dramatic rise in childhood obesity, the Centers for Disease Control (CDC) and other organizations have advocated increasing the time that elementary school children spend in physical education (PE) classes. However, little is known about the effect of PE on child weight. This paper measures that effect by instrumenting for child PE time with state policies, using data from the Early Childhood Longitudinal Study, Kindergarten Cohort (ECLS-K) for 1998-2004. Results from IV models indicate that PE lowers BMI z-score and reduces the probability of obesity among 5th graders (in particular, boys), while the instrument is insufficiently powerful to reliably estimate effects for younger children. This represents some of the first evidence of a causal effect of PE on youth obesity, and thus offers at least some support to the assumptions behind the CDC recommendations. We find no evidence that increased PE time crowds out time in academic courses or has spillovers to achievement test scores.
    JEL: H75 I12 I18 I21 K32
    Date: 2012–08
  21. By: Olivier Deschenes
    Abstract: This paper presents a survey of the empirical literature studying the relationship between health outcomes, temperature, and adaptation to temperature extremes. The objective of the paper is to highlight the many remaining gaps in the empirical literature and to provide guidelines for improving the current Integrated Assessment Model (IAM) literature that seeks to incorporate human health and adaptation in its framework. I begin by presenting the conceptual and methodological issues associated with the measurement of the effect of temperature extremes on health, and the role of adaptation in possibly muting these effects. The main conclusion that emerges from the literature is that despite the wide variety of data sets and settings most studies find that temperature extremes lead to significant reductions in health, generally measured with excess mortality. Regarding the role of adaptation in mitigating the effects of extreme temperature on health, the available knowledge is limited, in part due to the lack of real-world data on measures of adaptation behaviors. Finally, the paper discusses the implications of the currently available evidence for assessments of potential human health impacts of global climate change.
    JEL: I1 Q5 Q54
    Date: 2012–08

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