nep-hea New Economics Papers
on Health Economics
Issue of 2013‒03‒16
35 papers chosen by
Yong Yin
SUNY at Buffalo

  1. A Laboratory Experiment for the Estimation of Health Risks: Policy Recommendations. By Andreas Drichoutis; Phoebe Koundouri; Mavra Stithou
  2. How Does the Composition of Disability Insurance Applicants Change Across Business Cycles? By Norma B. Coe; Matthew S. Rutledge
  3. The Use of VA Disability Benefits and Social Security Disability Insurance Among Veterans By Janet M. Wilmoth; Andrew S. London; Colleen M. Heflin
  4. Why the Rich Drink More but Smoke Less: The Impact of Wealth on Health Behaviors By Hans van Kippersluis; Titus J. Galama
  5. Impacts of Parental Health Shocks on Children's Non-Cognitive Skills By Franz Westermaier; Brant Morefield; Andrea M. Mühlenweg
  6. Mortality beliefs distorted: Magnifying the risk of dying young By Peter Jarnebrant; Kristian Ove R. Myrseth
  7. Does Job Insecurity Deteriorate Health? A Causal Approach for Europe By Eve Caroli; Mathilde Godard
  8. Family income and child health in the UK By Bénédicte Apouey; Pierre-Yves Geoffard
  9. Physicians' balance billing, supplemental insurance and access to health care By Izabela Jelovac
  10. HOW DO HOSPITALS RESPOND TO PRICE CHANGES?EVIDENCE FROM NORWAY By Janueleviciute, Jurgita; Askildsen, Jan Erik; Kaarbøe, Oddvar; Siciliani, Luigi; Sutton, Matt
  11. Price of Medicaid and Uncompensated Care compared to Medicare and Private care: A translog shadow pricing approach for Floridian hospital outputs By Jean-Philippe Boussemart; Hervé Leleu; Viviane Valdmanis
  12. BMI Changes in Russian Adults: The Role of Health Related Behaviors and Spousal Relationships By Huffman, Sonya K.
  13. Optimal Health and Environmental Policies in a Pollution-Growth Nexus By Wang, Min; Zhao, Jinhua; Bhattacharya, Joydeep
  14. The Demand for Cigarettes as Derived from the Demand for Weight Control By Cawley, John; von Hinke Kessler Scholder, Stephanie
  15. Health reform and service satisfaction in the poor : Turkey By Hazama, Yasushi
  16. Tobacco Economic of Indonesia: Poor Households' Spending Pattern, Tax Regressivity and Economic Wide Impact of Cigarette Excise Tax Simplification By Rus'an Nasrudin; Ledi Trialdi; Djoni Hartono; Abdillah Ahsan
  17. Systems Model of Physician Professionalism in Practice. By Barrett T. Kitch; Catherine DesRoches; Cara Lesser; Amy Cunningham; Eric G. Campbell
  18. The ACA, Health Care Costs, and Disparities in Employer-Sponsored Health Insurance. By Nan L. Maxwell
  19. Helping You Take Care of Yourself Men of Color Prostate Health Workshops. By Laura Ruttner; Irina Cheban; So O'Neil
  20. Effects of Pharmaceutical Promotion: A Review and Assessment By Dhaval M. Dave
  21. Estimating the Impact of Means-tested Subsidies under Treatment Externalities with Application to Anti-Malarial Bednets By Debopam Bhattacharya; Pascaline Dupas; Shin Kanaya
  22. The Effects of Poor Neonatal Health on Children's Cognitive Development By David N. Figlio; Jonathan Guryan; Krzysztof Karbownik; Jeffrey Roth
  23. How do Hospitals Respond to Negative Financial Shocks? The Impact of the 2008 Stock Market Crash By David Dranove; Craig Garthwaite; Christopher Ody
  24. Physical Activity and Health By Gregory J. Colman; Dhaval M. Dave
  25. When Is Prevention More Profitable than Cure? The Impact of Time-Varying Consumer Heterogeneity By Michael Kremer; Christopher M. Snyder
  26. The Effect of Deceptive Advertising on Consumption of the Advertised Good and its Substitutes: The Case of Over-the-Counter Weight Loss Products By John Cawley; Rosemary Avery; Matthew Eisenberg
  27. Disability, Earnings, Income and Consumption By Bruce D. Meyer; Wallace K.C. Mok
  28. Something in the Water: Contaminated Drinking Water and Infant Health By Janet Currie; Joshua S. Graff Zivin; Katherine Meckel; Matthew J. Neidell; Wolfram Schlenker
  29. The political economics of social health insurance: the tricky case of individuals’ preferences By Pfarr, Christian; Schmid, Andreas
  30. Crime, health and wellbeing – Longitudinal evidence from Mexico By Braakmann, Nils
  31. Endogenous fertility, endogenous lifetime and economic growth: the role of child policies By Fanti, Luciano; Gori, Luca
  32. The Development of Long-Term Care in Post-Socialist Member States of the EU By Stanislawa Golinowska; Agnieszka Sowa
  33. Getting a Sporting Chance: Title IX and the Intergenerational Transmission of Health By Lisa Schulkind
  34. Risky Sports and the Value of Information By Leiter, Andrea; Rheinberger, Christoph
  35. Social Determinants of Child Health in Colombia: Can Community Education Moderate the Effect of Family Characteristics? By Ana Maria Osorio; Catalina Bolancé; Nyovane Madise; Katharina Rathmann

  1. By: Andreas Drichoutis; Phoebe Koundouri; Mavra Stithou
    Abstract: Environmental health hazards in Asopos River Basin (RB) rise concerns on health risk not only for the residents of the catchment but also for the consumers of the area s products across the country. As a result, the focus of this chapter is on the estimation of theses health risks. In order to assess the social cost from consuming products produced in an area where water resources are not in good condition a lab experimental auction has been conducted. According to the details of the experiment presented at the beginning of the chapter all participants were asked to bid to exchange a product from region A (the polluted one) with a similar product from a region in a good ecological status (in the terminology of the European Water Framework Directive (WFD)), region B. After the presentation of the employed methodology econometric analysis was conducted. The output of this analysis is an average Willingness-to-Pay (WTP) for the specific sample of consumers. WTP represents the maximum amount of money a person would be willing to pay in order to receive a good or avoid an undesired impact. The chapter concludes with policy recommendations and suggests that unless an epidemiology study confirms the health hazards from consuming agricultural products cultivated in the area of Asopos (area similar to the characteristics of region A), the estimated amount is a net cost suffered by the local farmers and compensation measures have to be adopted.
    Date: 2013–03–06
  2. By: Norma B. Coe; Matthew S. Rutledge
    Abstract: Much as in previous recessions, the number of applications to public disability insurance programs increased sharply during the Great Recession. We find that the composition of applicants also changes across business cycles. For example, applicants during economic downturns, and especially during the Great Recession, are younger, better educated, higher income, and more likely to have recent work experience. However, we find only mixed evidence supporting the theory that the increase in applications in downturns is caused by healthier applicants who apply to disability programs only because they are unemployed. We formally decompose how the differences among the applicants across the business cycle – both from peak to trough and from trough to trough – contribute to the increased probability of applying for, and being awarded, benefits. We find that changing demographics and unemployment rates explain less than half of the increase in the application rate and only one quarter of the increase in the awards to applicants (the allowance rate) between the 2004-2006 expansion and the Great Recession. Further, these same factors predict a fall in the award rate (among eligible individuals), in contrast to the increase observed in the data. Together with the fact that there have been no programmatic changes in the disability programs in the 2000s, these results suggest there have been fundamental changes over the last decade in the way that people apply to disability and in the way these applications are evaluated that cannot be explained by observable differences.
    Date: 2013–02
  3. By: Janet M. Wilmoth; Andrew S. London; Colleen M. Heflin
    Abstract: Although there is substantial functional limitation and disability among veterans of all ages, relatively little is known about veterans’ uptake of Department of Veterans Affairs (VA) Disability Benefits and Social Security Disability Insurance (DI). This project uses data from the 1992, 1993, 1996, 2001, 2004, and 2008 Survey of Income and Program Participation to examine veterans’ participation in VA and DI programs. The results indicate that the majority of veterans do not receive VA or DI benefits, but veterans’ use of these programs has been increasing over time. A higher percentage of veterans receive VA compensation only, which ranges from 4.9 percent in 1992 to 13.2 percent in 2008, than DI compensation only, which ranges from 2.9 percent in 1992 to 6.7 percent in 2008. Furthermore, the rate of joint participation in these two programs is low, ranging from less than 1 percent in 1992 to 3.6 percent in 2008. Veterans experience relatively few within-panel transitions between VA and DI programs. Overall, the likelihood of any disability program use is higher among veterans who served during multiple time periods, are older, black or Hispanic, currently married, and have less than a high school education. Among users, the likelihood of any VA use in contrast to only DI use is higher among veterans who served since 1990, are younger, Hispanic, highly educated, and currently married. Among users, variation in the likelihood of any DI use relative to only VA use generally mirrors variation in the likelihood of any VA use, although there are differences in associations with race/ethnicity, education, and marital status.
    Date: 2013–02
  4. By: Hans van Kippersluis (Erasmus University Rotterdam); Titus J. Galama (University of Southern California, Dornsife College Center for Economic and Social Research & RAND Corporation, USA)
    Abstract: Wealthier individuals engage in healthier behavior. This paper seeks to explain this phenomenon by developing a theory of health behavior, and exploiting both lottery winnings and inheritances to test the theory. We distinguish between the direct monetary cost and the indirect health cost (value of health lost) of unhealthy consumption. The health cost increases with wealth and the degree of unhealthiness, leading wealthier individuals to consume more healthy and moderately unhealthy, but fewer severely unhealthy goods. The empirical evidence presented suggests that differences in health costs may indeed provide an explanation for behavioral differences, and ultimately health outcomes, between wealth groups.
    Keywords: consumption; health; health capital; health behavior; wealth
    JEL: D91 I10 I12 I14 J24
    Date: 2013–03–05
  5. By: Franz Westermaier; Brant Morefield; Andrea M. Mühlenweg
    Abstract: We examine how parental health shocks affect children’s non-cognitive skills. Based on a German mother-and-child data base, we draw on significant changes in self-reported parental health as an exogenous source of health variation to identify effects on outcomes for children at ages of three and six years. At the age of six, we observe that maternal health shocks in the previous three years have significant negative effects on children’s behavioral outcomes. The most serious of these maternal health shocks decrease the observed non-cognitive skills up to half a standard deviation. Paternal health does not robustly affect non-cognitive outcomes.
    Keywords: Human capital, health, non-cognitive skills
    JEL: I00 J24 I10
    Date: 2013
  6. By: Peter Jarnebrant (ESMT European School of Management and Technology); Kristian Ove R. Myrseth (ESMT European School of Management and Technology)
    Abstract: We explore mortality beliefs by eliciting individual-level belief distributions for participants’ remaining lifespan. Across two independent samples, from Germany and the USA, we find that individuals—while accurately forecasting their life expectancy—substantially overestimate the likelihood of dying young (<50 years) and overestimate the likelihood of reaching very old age (>100 years). In other words, the modes of the belief distributions are relatively accurate, but the tails of the belief distributions are significantly ‘fatter’ than the corresponding tails of distributions obtained from demographic data. Our results are robust to variations in belief elicitation techniques, and to assumptions underlying normative longevity forecasts. The results have implications for a range of questions of economic behavior—including intertemporal choice, consumption smoothing, saving, and risk management.
    Keywords: mortality, beliefs, risk perception, judgment
    Date: 2013–02–28
  7. By: Eve Caroli (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 - Institut national de la recherche agronomique (INRA), EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris, LEDa - Laboratoire d'Economie de Dauphine - Université Paris IX - Paris Dauphine, Legos - Laboratoire d'Economie et de Gestion des Organisations de Santé - Université Paris IX - Paris Dauphine); Mathilde Godard (Legos - Laboratoire d'Economie et de Gestion des Organisations de Santé - Université Paris IX - Paris Dauphine, CREST - Centre de Recherche en Économie et Statistique - INSEE - École Nationale de la Statistique et de l'Administration Économique, LEDa - DIAL - Laboratoire d'Economie de Dauphine - Economie de la mondialisation et du développement - Université Paris IX - Paris Dauphine : EA4404)
    Abstract: This paper estimates the causal effect of job insecurity on health in a sample of 22 European countries. We rely on an original instrumental variable approach based on evidence that workers feel more insecure with respect to their job if employed in sectors with a high natural rate of layoff, but relatively less so if they live in a country where employment is strongly protected by the law. Using cross-country data from the 2010 European Working Conditions Survey, we show that when the potential endogeneity of job insecurity is not accounted for, the latter appears to deteriorate almost all health outcomes. When tackling the endogeneity issue, the health-damaging effect of job insecurity is confirmed for a subgroup of health outcomes, namely self-rated health, being sick in the past 12 month, suffering from headaches or eyestrain and depression or anxiety. Job insecurity also appears to deteriorate individual well-being. As for other health variables, the impact of job insecurity appears to be insignificant at conventional levels
    Keywords: Job insecurity ; Health ; Instrumental Variables
    Date: 2013–01
  8. By: Bénédicte Apouey (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 - Institut national de la recherche agronomique (INRA)); Pierre-Yves Geoffard (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 - Institut national de la recherche agronomique (INRA))
    Abstract: Recent studies examining the relationship between family income and child health in the UK have produced mixed findings. We re-examine the income gradient in child general health and its evolution with child age in this country, using a very large sample of British children. We find that there is no correlation between income and child general health at ages 0-1, that the gradient emerges around age 2 and is constant from age 2 to age 17. In addition, we show that the gradient remains large and significant when we try to address the endogeneity of income. Furthermore, our results indicate that the gradient in general health reflects a greater prevalence of chronic conditions among lowincome children and a greater severity of these conditions. Taken together, these findings suggest that income does matter for child health in the UK and may play a role in the intergenerational transmission of socioeconomic status.
    Keywords: Child health ; Family income ; Gradient
    Date: 2013–02–26
  9. By: Izabela Jelovac (GATE Lyon Saint-Etienne - Groupe d'analyse et de théorie économique - CNRS : UMR5824 - Université Lumière - Lyon II - École Normale Supérieure - Lyon)
    Abstract: Some countries allow physicians to balance bill patients, that is, to bill a fee above the one that is negotiated with, and reimbursed by the health authorities. Balance billing is known for restricting access to physicians' services while supplemental insurance against balance billing amounts is supposed to alleviate the access problem. This paper analyzes in a theoretical setting the consequences of balance billing on the fees setting and on the inequality of access among the users of physicians' services. It also shows that supplemental insurance against the expenses associated with balance billing, rather than alleviating the access problem, increases it.
    Keywords: Physicians' fees; balance billing; supplemental insurance
    Date: 2013–02–12
  10. By: Janueleviciute, Jurgita (Department of Economics, University of Bergen); Askildsen, Jan Erik (UniRokkansenteret); Kaarbøe, Oddvar (Department of Economics, University of Bergen); Siciliani, Luigi (Department of Economics and Related Studies, University of York); Sutton, Matt (Centre for Health Economics, University of Manchester)
    Abstract: Many publicly funded health systems use prospective activity-based financing to increase hospital production and efficiency. The aim of this study is to investigate whether price changes for different treatments affect the mix of activity provided by hospitals. We exploit variations in prices created by changes in the national average treatment cost per DRG offered to Norwegian hospitals over a period of five years (2003-2007). We use data from the Norwegian Patient Register, containing individual-level information on age, gender, type of treatment, diagnosis, number of co-morbidities and the national average treatment costs per DRG. To examine the changes in activity within the DRGs over time, fixed-effect models are applied. The results suggest that a ten-percent increase in price leads to a rise of one percent in the number of patients treated. This increase is mainly due to more admission of emergency patients, rather than to increases in elective activity.
    Keywords: Hospitals; DRGs; prices; activity
    JEL: H42 I11
    Date: 2013–03–08
  11. By: Jean-Philippe Boussemart (IESEG School of Management (LEM-CNRS) and University of Lille); Hervé Leleu (CNRS-LEM and IESEG School of Management); Viviane Valdmanis (University of the Sciences in Philadelphia)
    Keywords: Hospital efficiency, Shadow Prices, Health Production
    JEL: I11 I12 C54
    Date: 2013–01
  12. By: Huffman, Sonya K.
    Abstract: The paper investigates the effects of changes in marital status and health related behaviors (smoking and drinking) on the body mass index (BMI) in Russian adults over a ten-year period. Smoking and drinking behavior changes have played an important part in health status changes over 1994 to 2004. The results indicate that the individual weight/BMI changes asymmetrically in health determinants; the sign and the magnitude of the response are different depending on the starting point and whether there is an increase or a decrease in the explanatory variable. Males’ BMI decreases with smoking and increases with quitting smoking, but females’ BMI increases with drinking alcohol and decreases with stopping drinking. Losing a partner decreases only the females’ BMI, but gaining a spouse/partner is associated with increases in BMI for both genders. For married females and males, the change in spousal BMI is significantly positively related. Understanding interactions between individual health-related behaviors and the set of determinants that contribute to such behaviors is a fundamental step in the design of effective interventions.
    Keywords: BMI; Russia; health related behaviors; asymmetric response
    JEL: D12 I12 O52
    Date: 2013–03–06
  13. By: Wang, Min; Zhao, Jinhua; Bhattacharya, Joydeep
    Abstract: This paper shows how policies aimed at insuring health risks and those intended to improve the environment are (and should be) deeply intertwined. In the model economy, inspired by recent Chinese experience, pollution raises the likelihood of poor health in the future prompting agents to self insure against anticipated, rising medical expenses. The increased saving generates more capital while capital use by firms generates more pollution. Along the transition, sucha pollution-growth nexus may be attractive from a capital-accumulation perspective; however, rising pollution, via the health channel, definitely hurts welfare. Availability of private health insurance to top up pay-as-you-go coverage of medical bills together with a Pigouvian tax on emissions can replicate the first best.
    Keywords: pollution; health; overlapping generations model; saving
    JEL: E2 O13
    Date: 2013–03–08
  14. By: Cawley, John (Cornell University); von Hinke Kessler Scholder, Stephanie (University of York)
    Abstract: We provide new evidence on the extent to which the demand for cigarettes is derived from the demand for weight control (i.e. weight loss or avoidance of weight gain). We utilize nationally representative data that provide the most direct evidence to date on this question: individuals are directly asked whether they smoke to control their weight. We find that, among teenagers who smoke frequently, 46% of girls and 30% of boys are smoking in part to control their weight. This practice is significantly more common among youths who describe themselves as too fat than those who describe themselves as about the right weight. The derived demand for cigarettes has important implications for tax policy. Under reasonable assumptions, the demand for cigarettes is less price elastic among those who smoke for weight control. Thus, taxes on cigarettes will result in less behavior change (but more revenue collection and less deadweight loss) among those for whom the demand for cigarettes is a derived demand. Public health efforts to reduce smoking initiation and encourage cessation may wish to design campaigns to alter the derived nature of cigarette demand, especially among adolescent girls.
    Keywords: smoking, cigarettes, obesity, BMI, weight, derived demand, price elasticity
    JEL: I1 D01 H2 H3
    Date: 2013–02
  15. By: Hazama, Yasushi
    Abstract: Turkey began to reform its health care system in 2003 and introduced universal health insurance in 2008. This paper tests the effect of health reform in Turkey on satisfaction in the poor with public health services. An ordered logit model is applied to a pooled dataset compiled from the Life Satisfaction Survey (N=60,281) by the Turkish Statistical Institute during the period from 2003 to 2011. The results reveal that at the outset the lowest 30% income group was less satisfied than the highest 70% income group but this satisfaction gap dissipated after 2004 and did not reappear during the post-reform period (2009-2011).
    Keywords: Turkey, Public health, Health insurance, Health care
    JEL: I18
    Date: 2013–02
  16. By: Rus'an Nasrudin (Department of Economics, Faculty of Economics, University of Indonesia); Ledi Trialdi (Department of Economics, Faculty of Economics, University of Indonesia); Djoni Hartono (Graduate Program in Economics, Faculty of Economics, University of Indonesia); Abdillah Ahsan (The Demographic Institute, Faculty of Economics, University of Indonesia)
    Abstract: Policy to reduce cigarette consumption is needed because of the harm to both smokers and the surrounding healthy. In narrow sense, the harm of cigarette consumption for poor households needs to be taken into account into policy consideration as it expected to sacrifies essential spending for the poor. In general, any policy related to any influential sector in the economy, including tobacco sector, needs an economic wide impact consideration. This study aims to justify the policy on three grounds: analysis on poor household with smoker in terms of their spending pattern, an assessment of the cigarette excise tax burden's regressivity and and economic wide impact analysis of a cigarette excise tax simplification. This study find that there is tendency of lower spending on essential good (health and food) of poor household with smoker than without smoker. Secondly, indeed, the tax burden of Indonesia's excise tax is regressive so that it put burden more to the poor than the richer. Lastly, a cigarette tax increase will reduce national output with considerably small impact but moderately increase government revenue to boost the economy through infrastructure spending as the optimum opt.
    Keywords: Cigarette, Consumption Pattern, Excise Tax, Regressivity, Computable General Equilibrium
    JEL: I18 D58
    Date: 2013–03
  17. By: Barrett T. Kitch; Catherine DesRoches; Cara Lesser; Amy Cunningham; Eric G. Campbell
    Keywords: Systems Model, Physician Professionalism
    JEL: C
    Date: 2013–02–28
  18. By: Nan L. Maxwell
    Keywords: Affordable Care Act, employer-sponsored health insurance, workforce skills, benefits, disparities, low-wage workers
    JEL: I J
    Date: 2013–03–30
  19. By: Laura Ruttner; Irina Cheban; So O'Neil
    Keywords: African Americans, Prostate Cancer, Massachusetts, Health
    JEL: I
    Date: 2013–03–01
  20. By: Dhaval M. Dave
    Abstract: This review discusses the role of consumer-directed and physician-directed promotion in the pharmaceutical market, based on the classic conceptual framework of whether such promotion is “persuasive” and/or “informative”. Implications for public health and welfare partly depend on whether, and to what extent, advertising: 1) raises “selective” or brand-specific demand versus “primary” or industry-wide demand; 2) impacts drug costs; and 3) impacts competition. Empirical evidence from the literature bearing on these effects is surveyed. These studies show that pharmaceutical promotion has both informative and persuasive elements. Consumer advertising is more effective at enlarging the market, educating consumers, inducing physician contact, expanding drug treatment, and promoting adherence among existing users. Physician advertising is primarily persuasive in nature, effectively increasing selective brand demand. Evidence bearing on the effects of promotion on competition and prices is more limited. However, there is no strong evidence that drug promotion deters entry, and there is some suggestive evidence that it may even be mildly pro-competitive. With respect to costs, some studies suggests that consumer advertising may weakly raise the average wholesale price, which is a manufacturer’s list price, but there is no strong indication that either consumer- or provider-directed promotion substantially raises retail-level prices. However, this is not to imply that potential promotion-driven substitution from non-advertised to advertised drugs cannot have effects on total drug costs. While most of these effects point to potential welfare improvements as a result of pharmaceutical promotion, there is also evidence that consumer ads may induce overuse and overtreatment in certain cases. Market expansion, overtreatment and shifting brands for non-therapeutic reasons further raise the concern of a sub-optimal patient-drug match at least for some marginal patients. A comprehensive evaluation of the welfare effects of pharmaceutical promotion requires a balanced assessment of these benefits and costs.
    JEL: D22 I0 I11 I12 I18 M3
    Date: 2013–02
  21. By: Debopam Bhattacharya; Pascaline Dupas; Shin Kanaya
    Abstract: Regular use of effective health-products such as insecticide-treated mosquito nets (ITN) by a household benefits its neighbors by (a) reducing chances of infection and (b) raising awareness about product-effectiveness, thereby increasing product-use. Due to their potential social benefits and high purchase price, causing free-riding and sub-optimal private procurement, such products may be subsidized in developing countries through means-testing. Owing to associated spillover effects, cost-benefit analysis of such subsidies requires modelling behavioral responses of both the subsidized household and its neighbors. Using experimental data from Kenya where subsidies were randomized, coupled with GPS-based location information, we show how to estimate aggregate ITN use resulting from means-tested subsidies in the presence of such spatial spillovers. Accounting for spillovers introduces infinite-dimensional estimated regressors corresponding to continuously distributed location coordinates and makes the inference problem novel. We show that even if individual ITN use unambiguously increases with increasing incidence of subsidy in the neighborhood, ignoring spillovers may over- or under-predict overall ITN use resulting from a specific targeting rule, depending on the resulting aggregate incidence of subsidy. Applying our method to the Kenyan data, we find that (i) individual ITN use rises with neighborhood subsidy-rates, (ii) under means-testing, predicted ITN use is a convex increasing function of the subsidy incidence and (iii) ignoring spillovers implies a nearly-linear increasing relationship leading to over-estimation of ITN use at lower and under-estimation at higher subsidy rates.
    JEL: C01 H23 H4 H51 I38 O1
    Date: 2013–02
  22. By: David N. Figlio; Jonathan Guryan; Krzysztof Karbownik; Jeffrey Roth
    Abstract: We make use of a new data resource, merged birth and school records for all children born in Florida from 1992 to 2002, to study the effects of birth weight on cognitive development from kindergarten through schooling. Using twin fixed effects models, we find that the effects of birth weight on cognitive development are essentially constant through the school career; that these effects are very similar across a wide range of family backgrounds; and that they are invariant to measures of school quality. We conclude that the effects of poor neonatal health on adult outcomes are therefore set very early.
    JEL: I14 I20 I24
    Date: 2013–02
  23. By: David Dranove; Craig Garthwaite; Christopher Ody
    Abstract: The theory of cost-shifting posits that nonprofit hospitals respond to negative financial shocks by raising prices for privately insured patients. We examine how hospitals responded to the sharp reductions in their endowments caused by the 2008 stock market collapse. We find that the average hospital did not engage in cost-shifting, but average hospitals that likely have substantial market power did cost-shift. Investigating further how hospitals responded to the financial setback, we found no evidence of reductions in treatment costs. However, hospitals with large endowment losses delayed purchases of health information technology and curtailed the offering of unprofitable services.
    JEL: I1 I11 I18 L0 L21
    Date: 2013–02
  24. By: Gregory J. Colman; Dhaval M. Dave
    Abstract: While the link between physical activity and health has been studied, there are several limitations that persist in this literature relating to external and internal validity of the estimates, potential measurement error in self-reported weight and risk factors, failure to account for physical activity beyond exercise, and failure to separate the effects of exercise from other forms of physical activity. This study addresses these gaps and assesses plausibly causal effects of recreational exercise and other physical activity (including work-related activity) on the risk factors for heart disease, utilizing a population-based longitudinal dataset that contains objective information on key risk factors. We estimate fixed effects specifications that account for a host of unobservable confounding factors, and further estimate specifications with lagged outcome measures that allow us to bound plausibly causal effects under reasonable assumptions. There are four key patterns of results that emerge. First, the lagged effect of physical activity is almost always larger than the current effect. This suggests that current risk factors, not only obesity but also high blood pressure and heart rate, take years to develop, which underscores the importance of consistent physical activity to ward off heart disease. Second, we find that in general physical activity reduces risk factors for heart disease even after controlling, to some extent, for unobservable confounding influences. Third, not only recreational but work-related physical activity appears to protect against heart disease. Finally, there is evidence of a dose-response relationship such that higher levels of recreational exercise and other physical activity have a greater protective effect. Our estimates of the contemporaneous and durable effects suggest that the observed declines in high levels of recreational exercise and other physical activity can potentially account for between 12-30% of the increase in obesity, hypertension, diabetes, and heart disease observed over the sample period, ceteris paribus.
    JEL: I1 I12
    Date: 2013–02
  25. By: Michael Kremer; Christopher M. Snyder
    Abstract: We argue that in pharmaceutical markets, variation in the arrival time of consumer heterogeneity creates differences between a producer’s ability to extract consumer surplus with preventives and treatments, potentially distorting R&D decisions. If consumers vary only in disease risk, revenue from treatments—sold after the disease is contracted, when disease risk is no longer a source of private information—always exceeds revenue from preventives. The revenue ratio can be arbitrarily high for sufficiently skewed distributions of disease risk. Under some circumstances, heterogeneity in harm from a disease, learned after a disease is contracted, can lead revenue from a treatment to exceed revenue from a preventative. Calibrations suggest that skewness in the U.S. distribution of HIV risk would lead firms to earn only half the revenue from a vaccine as from a drug. Empirical tests are consistent with the predictions of the model that vaccines are less likely to be developed for diseases with substantial disease-risk heterogeneity.
    JEL: D42 I18 L11 O31
    Date: 2013–03
  26. By: John Cawley; Rosemary Avery; Matthew Eisenberg
    Abstract: This paper is the first to estimate the impact of exposure to deceptive advertising on consumption of the advertised product and its substitutes. We study the market for over-the-counter (OTC) weight-loss products, a market in which deceptive advertising is rampant and products are generally ineffective with potentially serious side effects. We control for the targeting of ads using indicator variables for each unique magazine read and television show watched. Our estimates indicate that exposure to deceptive advertising is associated with a lower probability that women, and a higher probability that men, consume OTC weight loss products. We find evidence of spillovers; exposure to deceptive print ads is associated with a higher probability of dieting and exercising for both men and women. We also find evidence that better-educated individuals are more sophisticated consumers of advertising and use it to make more health-promoting decisions.
    JEL: D83 I1 I18 M37 M38
    Date: 2013–03
  27. By: Bruce D. Meyer; Wallace K.C. Mok
    Abstract: Using longitudinal data for 1968-2009 for male household heads, we determine the prevalence of pre- retirement age disability and its association with a wide range of outcomes, including earnings, income, and consumption. We then employ some of these quantities in the optimal social insurance framework of Chetty (2006) to study current compensation for the disabled. Six of our findings stand out. First, disability rates are high. We divide the disabled along two dimensions based on the persistence and severity of their work-limiting condition. We estimate that a person reaching age 50 has a 36 percent chance of having been disabled at least temporarily once during his working years, and a 9 percent chance that he has begun a chronic and severe disability. Second, the economic consequences of disability are frequently profound. Ten years after disability onset, a person with a chronic and severe disability on average experiences a 79 percent decline in earnings, a 35 percent decline in after-tax income, a 24 percent decline in food and housing consumption and a 22 percent decline in food consumption. Third, economic circumstances differ sharply across disability groups. The outcome decline for the chronically and severely disabled is often more than twice as large as that for the average disabled head. Fourth, our findings show the partial and incomplete roles that individual savings, family support and social insurance play in reducing the consumption drop that follows disability. Fifth, time use and detailed consumption data further indicate that disability is associated with a decline in well-being. Sixth, using the quantities we have estimated, we provide the range of behavioral elasticities and preference parameters consistent with current disability compensation being optimal within the Chetty framework.
    JEL: H53 H55 I3 J22 J26 J68
    Date: 2013–03
  28. By: Janet Currie; Joshua S. Graff Zivin; Katherine Meckel; Matthew J. Neidell; Wolfram Schlenker
    Abstract: This paper provides estimates of the effects of in utero exposure to contaminated drinking water on fetal health. We examine the universe of birth records and drinking water testing results for the state of New Jersey from 1997 to 2007. Our data enable us to compare outcomes across siblings who were potentially exposed to differing levels of harmful contaminants from drinking water while in utero. We find small effects of drinking water contamination on all children, but large and statistically significant effects on birth weight and gestation of infants born to less educated mothers. We also show that those mothers who were most affected by contaminants were the least likely to move between births in response to contamination.
    JEL: I12 Q51 Q53
    Date: 2013–03
  29. By: Pfarr, Christian; Schmid, Andreas
    Abstract: Social health insurance systems can be designed with different levels of state involvement and varying degrees of redistribution. In this article we focus on citizens’ preferences regarding the design of their health insurance coverage including the extent of redistribution. Using a microeconomic model we hypothesize that the individual’s preferred options are determined by the relative income position and the relative risk of falling ill. Only individuals who expect to realize a net profit through the implicit redistributive transfers will favour a public insurance coverage over a private one. We test this hypothesis empirically using three dis-tinct approaches. The first two are based on survey questions focusing on the type of coverage and the degree of redistribution respectively. The third is based on a discrete choice experiment thus accounting for trade-offs and budget constraints. The data is from a representative sample of 1.538 German individuals who were surveyed and participated in the DCE in early 2012. We find that the model has to be rejected. There is a wide consensus that redistributive elements should be an integral part of the social health insurance system and could even be extended. However, there are also preferences for health insurance coverage that can be individually optimized.
    Keywords: social health insurance; preferences; discrete choice experiment
    JEL: C93 H23 H51
    Date: 2013–02
  30. By: Braakmann, Nils
    Abstract: This paper uses variation in victimization probabilities between individuals living in the same community to shed new light on the costs of crime. I use panel data from the Mexican Family Life Survey for 2002 and 2005 and look at the impact of within-community differences in victimization risk on changes in self-rated and mental health. My results from fixed effects and instrumental variable estimations point towards substantial negative health effects of actual victimization, which might help to explain the existence of compensating differentials in wages or house prices found in earlier studies.
    Keywords: cost of crime; victimization; health
    JEL: H40 I10 I12 K00 K42 R23
    Date: 2013–01–21
  31. By: Fanti, Luciano; Gori, Luca
    Abstract: We examine the effects of child policies on both transitional dynamics and long-term demo-economic outcomes in an overlapping-generations neoclassical growth model à la Chakraborty (2004) extended with endogenous fertility under the assumption of weak altruism towards children. The government invests in public health, and an individual’s survival probability at the end of youth depends on health expenditure. We show that multiple development regimes can exist. However, poverty or prosperity do not necessarily depend on the initial conditions, since they are the result of how child policy is designed. A child tax for example can be used effectively to enable those economies that were entrapped in poverty to prosper. There is also a long-term welfare-maximising level of the child tax. We show that, a child tax can be used to increase capital accumulation, escape from poverty and maximise long-term welfare also when (i) a public pay-as-you-go pension system is in place, (ii) the government issues an amount of public debt. Interestingly, there also exists a couple child tax-health tax that can be used to find the second-best optimum optimorum. In addition, we show that results are robust to the inclusion of decisions regarding the child quantity-quality trade off under the assumption of impure altruism. In particular, there exists a threshold value of the child tax below (resp. above) which child quality spending is unaffordable (resp. affordable) and different scenarios are in existence.
    Keywords: Child policy; Endogenous fertility; Health; Life expectancy; OLG model
    JEL: I1 J13 O4
    Date: 2013–03–09
  32. By: Stanislawa Golinowska; Agnieszka Sowa
    Abstract: Long-term care (LTC) in the new EU member states, which used to belong to the former socialist countries, is not yet a legally separated sector of social security. However, the ageing dynamics are more intensive in these states than in the old EU member states. This paper analyses the process of creating an LTC sector in the context of institutional reforms of social protection systems during the transition period. The authors explain LTC’s position straddling the health and social sectors, the underdevelopment of formal LTC, and the current policies regarding the risk of LTC dependency. The paper is based mainly on the analysis of information provided by country experts in the ANCIEN project.
    Keywords: Labor market, social policy and social services, Europe, long-term care, social sector reform, social policy
    JEL: I18 I31 J11 J18
    Date: 2013–01
  33. By: Lisa Schulkind (Department of Economics, Trinity College)
    Abstract: We know that healthier mothers tend to have healthier infants, but we do not know how much of that relationship reflects the intergenerational transmission of genetic attributes versus environmental influences. From a policy perspective, it is crucial to understand which environmental influences are important, and whether investments in one generation affect outcomes for the next. I use variation in the implementation of Title IX to measure the effects of increased athletic opportunities on the health of infants. Babies born to women with greater thletic opportunities as teenagers have babies that are healthier at birth. They are less likely to be born of low or very low birthweight, and have higher Apgar scores.
    Keywords: Intergenerational Transmission, Infant Health, Title IX
    JEL: I12 J62
    Date: 2013–03
  34. By: Leiter, Andrea; Rheinberger, Christoph
    Abstract: We develop a theoretical account of how athletes engaged in risky sports value riskreducing information and use stated-preference data from a sample of backcountry skiers to empirically challenge the predictions of our model. Risk taking in this specific context depends on the athlete’s personal attitudes toward risky activities and his strategies to control the risk. Usage of specific information is one strategy of risk control. We estimate the demand value for avalanche information. Caution is however warranted because unobserved factors may jointly affect the athlete’s perception of risk and his willingness-to-pay for obtaining the information. We use a recursive two stage estimation approach to account for endogeneity concerns. Our results indicate that the demand value of information increases with wealth and perceived risk and tends to decrease with better skills to control risk and more information about the prevailing field conditions. These results support our theoretical predictions and suggest that variation in athletes’ WTP can be explained by their beliefs about the usefulness of information.
    Keywords: Self-controlled risk, endogeneity, risky sports, value of information, WTP.
    JEL: D81 J17 Q26
    Date: 2013–02
  35. By: Ana Maria Osorio (Department of Econometrics, University of Barcelona, Barcelona, Spain. Department of Economics, Pontificia Universidad Javeriana, Cali, Colombi); Catalina Bolancé (Department of Econometrics, University of Barcelona, Barcelona, Spain.); Nyovane Madise (Division of Social Statistics and Centre for Global Health, Population, Poverty, and Policy, University of Southampton, Southampton, United Kingdom.); Katharina Rathmann (Berlin Graduate School of Social Sciences (BGSS), Humboldt Universität zu Berlin, Berlin, Germany.)
    Abstract: Contextual effects on child health have been investigated extensively in previous research. However, few studies have considered the interplay between community characteristics and individual-level variables. This study examines the influence of community education and family socioeconomic characteristics on child health (as measured by height and weight-for-age Z-scores), as well as their interactions. We adapted the Commission on Social Determinants of Health (CSDH) framework to the context of child health. Using data from the 2010 Colombian Demographic and Health Survey (DHS), weighted multilevel models are fitted since the data are not self-weighting. The results show a positive impact of the level of education of other women in the community on child health, even after controlling for individual and family socioeconomic characteristics. Different pathways through which community education can substitute for the effect of family characteristics on child nutrition are found. The interaction terms highlight the importance of community education as a moderator of the impact of the mother’s own education and autonomy, on child health. In addition, the results reveal differences between height and weight-for-age indicators in their responsiveness to individual and contextual factors. Our findings suggest that community intervention programmes may have differential effects on child health. Therefore, their identification can contribute to a better targeting of child care policies.
    Keywords: Child health, community education, maternal education, cross-level interactions, Colombia
    Date: 2013–03

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