nep-hea New Economics Papers
on Health Economics
Issue of 2013‒02‒16
twenty-one papers chosen by
Yong Yin
SUNY at Buffalo

  1. International Forum for Health Tourism - Scientific Report By Amphitheatre Foundation
  2. Accounting for Heterogeneity in Behavioral Responses to Health-Risk Information Treatments By John C. Whitehead; O. Ashton Morgan; William L. Huth; Gregory S. Martin; Richard Sjolander
  3. Harsh occupations, life expectancy and social security By Pierre Pestieau; Maria Racionero
  4. Dependency evolution in Spanish disabled population : a functional data analysis approach By Irene Albarrán Lozano; Pablo Alonso González; Ana Arribas Gil
  5. A Dynamic Efficiency Rationale for Public Investment in the Health of the Young By Andersen, Torben M; Bhattacharya, Joydeep
  6. Unemployment and Mortality: Evidence from the PSID By Halliday, Timothy J.
  7. Time Preferences and Lifetime Outcomes By Golsteyn, Bart H.H.; Grönqvist, Hans; Lindahl, Lena
  8. Smoking Bans, Cigarette Prices and Life Satisfaction By Odermatt, Reto; Stutzer, Alois
  9. Long-Run Effects of Childhood Shocks on Health in Late Adulthood: Evidence from the Survey of Health, Ageing, and Retirement in Europe By Nicole Halmdienst; Rudolf Winter-Ebmer
  10. Effects of Household Shocks and Poverty on the Timing of Traditional Male Circumcision and HIV Risk in South Africa By Atheendar S. Venkataramani; Brendan Maughan-Brown
  11. Parents' Preferences for Enhanced Access to the Pediatric Medical Home: A Qualitative Study. By Joseph S. Zickafoose; Lisa R. DeCamp; Dana J. Sambuco; Lisa A. Prosser
  12. How to Provide and Pay for Long-Term Care of an Aging Population is an International Concern By Marsha Gold
  13. Understanding and Information Failures: Lessons from a Health Microinsurance Program in India By Jean Philippe Platteau; Darwin Ugarte Ontiveros
  14. Effects of Bicycle Helmet Laws on Children's Injuries By Pinka Chatterji; Sara Markowitz
  15. Health Care Reform and Long-Term Care in the Netherlands By Erik Schut; Stéphane Sorbe; Jens Høj
  16. Prospect theory in the health domain: a quantitative assessment By Attema, Arthur; Brouwer, Werner; l'Haridon, Olivier
  17. Friends and health of the workers in Italy By Fiorillo, Damiano
  18. Hiring Workers with Disabilities when a Quota Requirement Exists: The relevance of firm’s size By Malo, Miguel A.; Pagan, Ricardo
  19. Complexity of Treatment, and Changes in Efficiency and Productivity for Directly Managed Italian Hospitals By PINTO, Claudio
  20. Accounting for trends in health poverty: A decomposition analysis for Britain, 1991-2008 By Michał Brzeziński
  21. How much international variation in child height can sanitation explain ? By Spears, Dean

  1. By: Amphitheatre Foundation (Amphitheatre Foundation)
    Abstract: The second edition of the International Forum for Health Tourism was held in Iasi between 25th and 27th of January. The event was organized by the Romanian College of Physicians and Amphitheater Foundation. Within the meeting were discussed issues regarding the progress that has been made since the previous edition of the Forum, held nationwide in November 2011, the problems facing the field, as well as proposals and plans for the future. The experts emphasized the need for amultidisciplinary approach and the existence of a general vision for health tourism development.
    Keywords: health tourism, economic development
    JEL: I15
    Date: 2013–01
  2. By: John C. Whitehead; O. Ashton Morgan; William L. Huth; Gregory S. Martin; Richard Sjolander
    Abstract: Traditional revealed and stated preference (RP/SP) models consider a typical individual’s behavioral responses to various policy-based information treatments. For some costbenefit applications in which resource managers are concerned with responses from a representative individual, this is sufficient. However, as behavioral responses to information treatments can vary across respondents, we develop a latent class analysis to examine unobserved homogenous subgroup responses to health-risk information treatments. Results from a probabilistic model indicate that homogenous classes of consumers respond differently to the health-risk information treatments. This suggests that future policy-based research could benefit from examining potential heterogeneity in individuals’ responses to risk information treatments in order to fully understand the efficacy of treatments on behavior. Key Words: Food safety technology; health-risk information; latent class analysis; revealed preference; stated preference
    Date: 2013
  3. By: Pierre Pestieau; Maria Racionero
    Abstract: Should special pension provisions be offered to workers in harsh occupations? We address this question in an optimal tax setting where individuals differ in longevity and occupation. Longevity is private information but workers in harsh occupations have on average shorter lifes than workers in safe occupations. We adopt a weighted utilitarian social objective to partially redress the implicit redistribution from short- to long-lived individuals that the unweighted utilitarian objective entails. We show that there is a case for differentiating the social security policy by occupation. We also show that short-lived workers are induced to overconsume when young and to retire early in order to prevent mimicking by long-lived ones. This is achieved by taxing, often quite heavily, the savings and the earnings from prolonging activity of short-lived individuals.
    Keywords: longevity, retirement, harsh occcupations, tagging
    JEL: H21 H55
    Date: 2013–01
  4. By: Irene Albarrán Lozano; Pablo Alonso González; Ana Arribas Gil
    Abstract: In a health context dependency is defined as lack of autonomy in performing basic activities of daily living that require the care of another person or significant help. However, this contingency, if present, changes throughout the lifetime. In fact, empirical evidence shows that, once this situation occurs, it is almost impossible to return to the previous state and in most cases the intensity increases. In this article, the evolution of the intensity in this situation is studied for the Spanish population affected by this contingency. Evolution in dependency can be seen as sparsely observed functional data, where for each individual we get a curve only observed at those points in which changes in the condition of his/her dependency occur. We use functional data analysis techniques such as curve registration, functional data depth or distance-based clustering to analyse this kind of data. This approach proves to be useful in this context since it takes into account the dynamics of the dependency process and provides more meaningful conclusions than simple pointwise or multivariate analysis. The database analysed comes from the Survey about Disabilities, Personal Autonomy and Dependency Situations, EDAD 2008, (Spanish National Institute of Statistics, 2008). The evaluation of the dependency situation for each person is ruled in Spain by the Royal Decree 504/2007 that passes the scale for assessment of the situation set by Act 39/2006. In this article, the scale value for each individual included in EDAD 2008 has been calculated according to this legislation. Differences between sex, ages and first appearance time have been considered and prediction of future evolution of dependency is obtained
    Keywords: Chain-ladder, Dependency, Disability, Forecasting, Functional data, Time warping model
    Date: 2013–02
  5. By: Andersen, Torben M; Bhattacharya, Joydeep
    Abstract: In this paper, we assume away standard distributional and static-efficiency arguments for public health, and instead, seek a dynamic efficiency rationale. We study a lifecycle model wherein young agents make health investments to reduce mortality risk. We identify a welfare rationale for public health under dynamic efficiency and exogenous mortalityeven when private and public investments are perfect substitutes. If health investment reduces mortality risk but individuals do not internalize its effect on the life-annuity interest rate, the “Philipson-Becker effect†emerges; when the young are net borrowers, it works together with dynamic efficiency to support a role for public health.
    Keywords: public health; dynamic efficiency; overlapping generations
    JEL: E2 I18
    Date: 2013–02–05
  6. By: Halliday, Timothy J. (University of Hawaii at Manoa)
    Abstract: In this paper, we use the death file from the Panel Study of Income Dynamics to investigate the relationship between county-level unemployment rates and mortality risk. After partialling out important confounding factors including baseline health status as well as state and industry fixed effects, we show that poor local labor market conditions are associated with higher mortality risk for working-aged men. In particular, we show that a one percentage point increase in the unemployment rate increases their mortality hazard by 6%. There is little to no such relationship for people with weaker labor force attachments such as women or the elderly. Our results contribute to a growing body of work that suggests that poor economic conditions pose health risks and illustrate an important contrast with studies based on aggregate data.
    Keywords: recessions, mortality, health, aggregation
    JEL: I0 I12 J1
    Date: 2013–01
  7. By: Golsteyn, Bart H.H. (Maastricht University); Grönqvist, Hans (SOFI, Stockholm University); Lindahl, Lena (SOFI, Stockholm University)
    Abstract: This paper investigates the relationship between time preferences and lifetime social and economic behavior. We use a Swedish longitudinal dataset that links information from a large survey on children's time preferences at age 13 to administrative registers spanning over five decades. Our results indicate a substantial adverse relationship between high discount rates and school performance, health, labor supply, and lifetime income. Males and high ability children gain significantly more from being future-oriented. These discrepancies are largest regarding outcomes later in life. We also show that the relationship between time preferences and long-run outcomes operates through early human capital investments.
    Keywords: intertemporal choice, personality, preference parameter, human capital, income, health
    JEL: D03 D91 J01
    Date: 2013–01
  8. By: Odermatt, Reto (University of Basel); Stutzer, Alois (University of Basel)
    Abstract: The consequences of tobacco control policies for individual welfare are difficult to assess. We therefore evaluate the impact of smoking bans and cigarette prices on subjective well-being by analyzing data for 40 European countries and regions between 1990 and 2011. We exploit the staggered introduction of bans and apply an imputation strategy to study the effect of anti-smoking policies on people with different propensities to smoke. We find that higher cigarette prices reduce the life satisfaction of likely smokers. Overall, smoking bans are not related to subjective well-being, but increase the life satisfaction of smokers who recently failed to quit smoking. The latter finding is consistent with cue-triggered models of addiction and the idea of bans as self-control devices.
    Keywords: smoking bans, cigarette prices, life satisfaction, addiction, self-control, tobacco control policies
    JEL: D03 D62 I18 K32
    Date: 2013–01
  9. By: Nicole Halmdienst (Department of Economics, University of Linz, Austria); Rudolf Winter-Ebmer
    Abstract: In this paper we address the long-run effects of childhood shocks on health in late adulthood. Applying a life-course approach and data from SHARE we estimate direct and indirect effects of shocks like relocation, dispossession, or hunger on health outcomes after age fifty. Having lived in a children’s home, in a foster family, or having suffered a period of hunger turn out to be the most detrimental. Using a finite mixture model, which allows to classify the associations between shocks and later health into a-priori unknown groups, we show that some adverse shocks have opposite effects for specific groups.
    Keywords: Early life experience, health, Europe
    JEL: J1 I12 J13
    Date: 2013–01
  10. By: Atheendar S. Venkataramani (Department of Medicine, Massachusetts General Hospital, Harvard University); Brendan Maughan-Brown (SALDRU, School of Economics, University of Cape Town)
    Abstract: Poverty may influence HIV risk by increasing vulnerability to economic shocks and thereby preventing key health investments. We explored this by examining the relationship between household shocks and the timing of traditional male circumcision, a practice associated with considerable expense and whose HIV-prevention benefits are larger when done earlier, even within young adulthood. Using unique data on a sample of Xhosa men, a group that almost universally practice traditional circumcision, we found that respondents in the poorest households delayed circumcision by two years if a household member experienced loss of income or death and/or illness. The impact of these shocks declined with increasing household income. Our findings suggest that interventions that work to mitigate the impact of shocks among the poor may be useful in HIV prevention efforts. More generally, they illustrate that the relationship between HIV and wealth may be more nuanced than assumed in previous work.
    Keywords: Economic shocks, poverty, male circumcision, HIV, South Africa
    Date: 2013
  11. By: Joseph S. Zickafoose; Lisa R. DeCamp; Dana J. Sambuco; Lisa A. Prosser
    Keywords: Pediatric Medlical Home, Enhanced Access, Qualitative Study, Health
    JEL: I
    Date: 2013–03–30
  12. By: Marsha Gold
    Keywords: Long-Term Care, Aging Population, International, Health; commentary
    JEL: I
    Date: 2013–01–30
  13. By: Jean Philippe Platteau (University of Namur); Darwin Ugarte Ontiveros (University of Namur)
    Abstract: This paper is an attempt to understand the factors underlying the low take up and contract renewal rates frequently observed in insurance programs in poor countries. This is done on the basis of the experience of a microinsurance health program in India. We show that deficient information about the insurance product and the functioning of the scheme, poor understanding of the insurance concept, and the resulting low use of the insurance products by eligible households are the major causes of the low contract renewal rate among the households which has previously enrolled into the program. A particularly interesting finding is that, when a household has received a negative payout during the preceding year (the cost of the premium has exceeded the insurance benefits), it is more inclined to renew its participation if it has a better understanding of what insurance exactly means (a redistribution between lucky and unlucky individuals). Such a finding strongly suggests that the understanding failure is a key problem in attempts to provide insurance to poor people, and this problem is obviously more difficult to overcome than the largely supply-driven information failure. That economists have neglected the role of the understanding failure is apparent from the lack of attention to this aspect in recent theories aimed at improving our knowledge of human behavior toward risk. Another central, policy-relevant finding of the study is that participation in previously constituted self-help groups has the effect of enhancing both the insurance take up and contract renewal rates. This points to the essential role of non-governmental organizations that operate at the grassroots level.
    Date: 2013–01
  14. By: Pinka Chatterji; Sara Markowitz
    Abstract: Cycling is popular among children, but results in thousands of injuries annually. In recent years, many states and localities have enacted bicycle helmet laws. We examine direct and indirect effects of these laws on injuries. Using hospital-level panel data and triple difference models, we find helmet laws are associated with reductions in bicycle-related head injuries among children. However, laws also are associated with decreases in non-head cycling injuries, as well as increases in head injuries from other wheeled sports. Thus, the observed reduction in bicycle-related head injuries may be due to reductions in bicycle riding induced by the laws.
    JEL: I0 K0
    Date: 2013–02
  15. By: Erik Schut; Stéphane Sorbe; Jens Høj
    Abstract: The Netherlands, as other OECD countries, faces the challenge of providing high quality health and long-term care services to an ageing population in a cost-efficient manner. In the health care sector, reforms have aimed at introducing more competition. Despite major changes and some positive effects, the reforms run the risk of getting stuck in the middle between a centralised system of state-controlled supply and prices and a decentralised system based on regulated competition, providing insufficient incentives for provision of quality services and expenditure control. The main challenges are to complete the transition to regulated competition in health care provision, to strengthen the role of health insurers as purchasing agents and to secure cost containment in an increasingly demand-driven health care sector. In 2012, reforms expanded the role of the market in the hospital sector and reinforced budget controls. Both measures are not consistent and may jeopardize both objectives. More competitive markets require, at least, provision of good quality information, appropriate financing and better efficiency incentives. In view of population ageing, current policies mean that the cost of long-term care is set to more than double over the coming decades. Insufficient incentives for cost-efficient purchasing of long-term care should be addressed. However, the government?s plan to transfer long-term care purchasing to health insurers is unpromising unless additional measures ensure that insurers bear the associated financial risks. In addition, home care should be further encouraged at the expense of institutional care, while screening and targeting should be improved. This Working Paper relates to the 2012 OECD Economic Survey of the Netherlands (<P>Réforme des soins de santé et soins de longue durée aux Pays-Bas<BR>Les Pays-Bas, comme les autres pays de l?OCDE, sont confrontés à la difficulté de fournir, au meilleur coût, des services de santé et des soins de longue durée de haute qualité à une population vieillissante. Dans le secteur de la santé, des réformes ont déjà été mises en oeuvre en vue d?intensifier la concurrence. Malgré des changements majeurs et certains effets positifs, les réformes risquent de s?enliser, prises en étau entre un système centralisé d?offre et de prix contrôlés par l?État et un système décentralisé fondé sur une concurrence réglementée, n?incitant pas suffisamment à fournir des services de qualité et à maîtriser les dépenses. Les principales difficultés consistent à mener à bien la transition vers un régime de concurrence réglementée dans la prestation de soins de santé, à renforcer le rôle des assureurs en tant qu'agents acheteurs et à assurer la maîtrise des coûts dans un secteur de la santé qui obéit de plus en plus à la demande. En 2012, les réformes ont accru le rôle du marché dans le secteur hospitalier et renforcé les contrôles budgétaires. Ces deux mesures ne sont pas compatibles et risquent de compromettre la réalisation des deux objectifs. Des marchés plus concurrentiels requièrent, au minimum, une information de bonne qualité, un financement approprié et des incitations plus fortes à l?efficience. Compte tenu du vieillissement de la population, les politiques actuelles feront plus que doubler le coût des soins de longue durée au cours des décennies à venir. Il faudrait inciter davantage à l?achat de soins de longue durée efficaces par rapport à leur coût. Cependant, le plan du gouvernement consistant à transférer l?achat de soins de longue durée aux assureurs est voué à l?échec en l?absence de mesures supplémentaires faisant supporter à ces derniers les risques financiers correspondants. Il faudrait en outre encourager les soins à domicile aux dépens des soins en établissement, tout en améliorant le filtrage et la fixation d?objectifs. Ce document de travail se rapporte à l?Étude économique des Pays-Bas de 2012 (
    Keywords: Netherlands, long-term care, health care reforms, health insurance, hospitals, regulated competition, Pays-Bas, soins de longue durée, réforme des systèmes de santé, assurance santé, hôpitaux, concurrence réglementée
    JEL: H51 I11 I18
    Date: 2013–01–11
  16. By: Attema, Arthur; Brouwer, Werner; l'Haridon, Olivier
    Abstract: It is well-known that expected utility (EU) has empirical deficiencies. Prospect theory (PT) has developed as an alternative with more descriptive validity. However, PT’s full function had not yet been quantified in the health domain. This paper is the first to simultaneously measure utility of life duration, probability weighting, and loss aversion for health. We observe loss aversion and risk aversion, which for gains can be explained by probabilistic pessimism. Utility for gains is almost linear. For losses, we find less weighting of probability 1/2 and concave utility. This contrasts with the common finding of convex utility for monetary losses. However, PT was proposed to explain choices among lotteries involving small outcomes. Life years are arguably not ‘small’ and need not generate convex utility for losses. Moreover, utility of life duration reflects discounting, causing concave utility. These results are a first step in fitting non-EU models for health-related decisions.
    Keywords: Loss aversion; Prospect theory; QALY model; Utility of life duration
    JEL: B41 I10
    Date: 2013–01–31
  17. By: Fiorillo, Damiano
    Abstract: Using a rich cross-sectional dataset, we estimate the effect of meetings with friends on self-perceived health, chronic conditions and limitations in daily activities of Italian employees. We address the self-selection of individuals in labour market using an Heckman selection model. Our main preliminary findings show that meetings with friends is positively correlated with self-perceived health, negatively associated with chronic conditions but not related to limitations in activities of daily living.
    Keywords: Health; income; friends; workers; Italy
    JEL: I12 Z0 C35
    Date: 2013–02–07
  18. By: Malo, Miguel A.; Pagan, Ricardo
    Abstract: We evaluate the impact of a mandatory quota of workers with disabilities using a sharp regression discontinuity design. We use data from a panel of Spanish firms where there is a mandatory quota of 2 per cent for firms with 50 or more workers. Non-parametric estimations show that strictly beyond the cut off of 50 workers there is an increase of 1.4 points in the percentage of workers with disabilities in the firm, just fulfilling the quota of 2 per cent. However, this effect has some lack of precision. In addition, for larger firm’s sizes the variation in the percentage of workers with disabilities will be more related with differences in firms’ characteristics.
    Keywords: Employment quota; disability; firm’s size; regression discontinuity
    JEL: I18 J21 J78 J88
    Date: 2013–02–07
  19. By: PINTO, Claudio (CELPE - Centre of Labour Economics and Economic Policy, University of Salerno - Italy)
    Abstract: Background: Data envelopment analysis (DEA) and the Malmquist index are frequently used in the hospital sector to measure efficiency. However, very few works are published for Italian hospitals, despite the fact that efficiency was the main driver guiding healthcare reform in the 1990s. Objectives: The objective of this study is derive technical efficiency and change in productivity of the Local Health Trust (LHT) in directly managed Italian hospitals. We will also explore whether the complexity of treated hospitals cases influences technical efficiency. Methods/approaches: The DEA technique and DEA-Malmquist index are used to derive technical efficiency, and changes in productivity and efficiency, for directly managed hospitals in Italy's public healthcare system. To control for the influence of the complexity of the treated cases on the technical efficiency, two DEA input models are examined. One of these models, weighs outputs with a case mix index (CMI) as a measure of the complexity of hospital treatment. Results: The results show that efficiency in the model not adjusted is on average 79,52% compared to 81,55 % efficiency in Model B (output adjusted with CMI), in efficiency level. In mean complexity of treatment, as measured with CMI, influence technical efficiency, as indicate in Table 5 and 6. Statistics tests reveal differences in the efficiency score distribution for Model A and Model B (adjusted). The influence of complexity of treatment on technical efficiency analysis, has hospital individual relevance. The Malmquist index reveals productivity improvement for 7 out of the 8 periods measured. Technical efficiency change is positive (improvement) between 2000 and 2005, and fall in 2006 and 2007. Technological change is positive in 1999-2000, 2000-2001, 2002-2003, 2005-2006, 2006-2007. Scale efficiency improves in 2000-2001, 2001-2002,2003-2004, 2004-2005. Practical implications: Between 1999 and 2007, for the sample, improved productivity was examined and attributed to an input reduction of the same output. This could mean that the reforms that took place in the 1990s were successful and that this direction is worth further pursuit. In light of these findings, one must make policy recommendations with caution, despite the fact, the complexity of treatments influence technical efficiency, hence the proportional reduction of the inputs vector.
    Keywords: Technical Efficiency; Productivity; Data Envelopment Analysis; DEA-Malmquist Index; Case Mix Index; Directly Managed Hospitals;
    JEL: C14 C33 D22 I12
    Date: 2013–01–31
  20. By: Michał Brzeziński (Faculty of Economic Sciences, University of Warsaw)
    Abstract: We use data from the British Household Panel Survey to analyse changes in poverty of self-reported health from 1991 to 2008. Recently introduced ordinal counterparts of the classical Foster, Greer, Thorbecke (1984) (FGT) poverty measures are used to decompose changes in self-reported health poverty over time into within-group health poverty changes and population shifts between groups. We also provide statistical inference for these ordinal FGT indices. Results suggest that the health poverty rate increased independently of health poverty threshold chosen. In case of other ordinal FGT indices, which are sensitive to depth and distribution of health poverty, results depend on the health poverty threshold. The subgroup decompositions of changes in total health poverty in Britain suggest that the most important poverty-increasing factors include a rise of both health poverty and population shares of persons cohabiting and couples with no children as well as an increase of the population of retired persons.
    Keywords: health poverty, ordinal FGT measures, self-reported health, statistical inference, British Household Panel Survey
    JEL: I32 D63 I14
    Date: 2013
  21. By: Spears, Dean
    Abstract: Physical height is an important economic variable reflecting health and human capital. Puzzlingly, however, differences in average height across developing countries are not well explained by differences in wealth. In particular, children in India are shorter, on average, than children in Africa who are poorer, on average, a paradox called"the Asian enigma"which has received much attention from economists. This paper provides the first documentation of a quantitatively important gradient between child height and sanitation that can statistically explain a large fraction of international height differences. This association between sanitation and human capital is robustly stable, even after accounting for other heterogeneity, such as in GDP. The author applies three complementary empirical strategies to identify the association between sanitation and child height: country-level regressions across 140 country-years in 65 developing countries; within-country analysis of differences over time within Indian districts; and econometric decomposition of the India-Africa height differences in child-level data. Open defecation, which is exceptionally widespread in India, can account for much or all of the excess stunting in India.
    Keywords: Population Policies,Early Child and Children's Health,Disease Control&Prevention,Health Monitoring&Evaluation,Youth and Governance
    Date: 2013–01–01

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