nep-hea New Economics Papers
on Health Economics
Issue of 2014‒01‒17
28 papers chosen by
Yong Yin
SUNY at Buffalo

  1. Mixed Method Evaluation of a Passive Health Sexual Information Texting Service in Uganda-Working Paper 332 By Julian Jamison, Dean Karlan, Pia Raffler
  2. When Is Prevention More Profitable than Cure? The Impact of Time-Varying Consumer Heterogeneity-Working Paper 334 By Michael Kremer, Christopher M. Snyder
  3. Is work bad for health? The role of constraint vs choice By Bassanini, Andrea; Caroli, Eve
  4. Introducing activity-based payment in the hospital industry: Evidence from French data By P. CHONÉ; F. EVAIN; L. WILNER; E. YILMAZ
  6. Living Forever: Entrepreneurial Overconfidence at Older Ages By Rietveld, C.A.; Groenen, P.J.F.; Koellinger, Ph.D.; van der Loos, M.J.H.M.; Thurik, A.R.
  7. Self-reported health care seeking behavior in rural Ethiopia: Evidence from clinical vignettes By Mebratie, A.D.; Van de Poel, E.; Debebe, Z.Y.; Abebaw Ejigie, D.; Alemu, G.; Bedi, A.S.
  8. Enrollment in community based health insurance schemes in rural Bihar and Uttar Pradesh, India By Panda, P.; Chakraborty, A.; Dror, D.M.; Bedi, A.S.
  9. Community-Based Health Insurance Schemes By Mebratie, A.D.; Sparrow, R.A.; Alemu, G.; Bedi, A.S.
  10. Healthcare Seeking Behavior among Self-help Group Households in Rural Bihar and Uttar Pradesh, India By Raza, W.A.; Panda, P.; Van de Poel, E.; Dror, D.M.; Bedi, A.S.
  11. Enrolment in Ethiopia’s Community Based Health Insurance Scheme By Derseh, A.; Sparrow, R.A.; Debebe, Z.Y.; Alemu, G.; Bedi, A.S.
  12. Systemic Review of Clinical- and Cost-effectiveness of Computerized Cognitive Behavioral Therapy (CCBT) for Adult Depression (Japanese) By SO Mirai
  13. Disability benefit growth and disability reform in the U.S.: lessons from other OECD nations By Burkhauser, Richard V.; Daly, Mary C.; McVicar, Duncan; Wilkins, Roger
  14. Does malaria control impact education? A study of the Global Fund in Africa By Maria Kuecken; Josselin Thuilliez; Marie-Anne Valfort
  15. The Effect of Hospital-Physician Integration on Health Information Technology Adoption. By Eric Lammers
  16. Does Health Information Exchange Reduce Redundant Imaging? Evidence From Emergency Departments. By Eric J. Lammers; Julia Adler-Milstein; Keith E. Kocher
  17. Estimates of the Potential Insurance Value of Disability Insurance for Individuals with Mental Health Impairments By John Bound; Kyle J. Caswell; Timothy Waidmann
  18. Disability Insurance and Healthcare Reform: Evidence from Massachusetts By Nicole Maestas; Kathleen J. Mullen; Alexander Strand
  19. Health Insurance and Retirement Decisions By John Karl Scholz; Ananth Seshadri
  20. Costs and Benefits of In-Kind Transfers: The Case of Medicaid Home Care Benefits By Ethan M.J. Lieber; Lee M. Lockwood
  21. Social Security Benefit Claiming and Medicare Utilization By John Bound; Helen Levy; Lauren Hersch Nicholas
  22. Cognitive Ability, Expectations, and Beliefs about the Future: Psychological Influences on Retirement Decisions By Andrew M. Parker; Leandro S. Carvalho; Susann Rohwedder
  23. Direct to Consumer Advertising of Pharmaceutical Drugs: Information and Persuasion By Talia Bar; Dean R. Lillard
  24. The Determinants of Rising Inequality in Health Insurance and Wages, Second Version By Rong Hai
  25. Bang for Your Buck: STI Risk and Pregnancy Risk as Sources of the Price Premium for Unprotected Sex By Manda, Constantine
  26. Convergence in Health Care Expenditure of 14 EU Countries: New Evidence from Non-linear Panel Unit Root Test By Lau, Marco Chi Keung; Fung, Ka Wai Terence
  27. Sanitation and externalities : evidence from early childhood health in rural India By Andres, Luis A.; Briceno, Bertha; Chase, Claire; Echenique, Juan A.
  28. On a simple quickest detection rule for health-care technology assessment By Daniele Bregantini; Jacco J.J. Thijssen

  1. By: Julian Jamison, Dean Karlan, Pia Raffler
    Abstract: We evaluate the impact of a health information intervention implemented through mobile phones, using a clustered randomized control trial augmented by qualitative interviews. The intervention aimed to improve sexual health knowledge and shift individuals towards safer sexual behavior by providing reliable information about sexual health. The novel technology designed by Google and Grameen Technology Center provided automated searches of an advice database on topics requested by users via SMS. It was offered by MTN Uganda at no cost to users. Quantitative survey results allow us to reject the hypothesis that improving access to information would increase knowledge and shift behavior to less risky sexual activities. In fact, we find that the service led to an increase in promiscuity, and no shift in perception of norms. Qualitative focus groups discussions support the findings of the quantitative survey results. We conclude by discussing a potential mechanism explaining the counterintuitive findings.
    Keywords: mHealth, SMS, text message, health care
    JEL: I11 I15
    Date: 2013–07
  2. 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.
    Keywords: prevention, pharmaceutical companies, HIV
    JEL: O31 L11 I18 D42
    Date: 2013–07
  3. By: Bassanini, Andrea; Caroli, Eve
    Abstract: This paper reviews the literature on the impact of work on health. We consider work along two dimensions: (i) the intensive margin, i.e. how many hours an individual works and (ii) the extensive margin, i.e. whether an individual is in employment or not, independent of the number of hours worked. We show that most of the evidence on the negative health impact of work found in the literature is based on situations in which workers have essentially no control (no choice) over the amount of work they provide. In essence, what is detrimental to health is not so much work per se as much as the gap which may exist between the actual and the desired amount of work, both at the intensive and extensive margins.
    Keywords: health; work; retirement; hours worked; job loss; individual choice
    Date: 2014–01
  4. By: P. CHONÉ (Insee); F. EVAIN (Insee); L. WILNER (Insee); E. YILMAZ (Insee)
    Abstract: Many countries have reformed hospital reimbursement policies to provide stronger incentives for quality and cost reduction. The purpose of this work is to show how the effect of such reforms depends on the intensity of local competition. We build a nonprice competition model to examine the effect of a shift from global budget to patient-based payment for public hospitals in France. We predict that the number of patient admissions should increase in public hospitals by more than in private clinics and that the increase in admissions should be stronger in public hospitals that are more exposed to competitive pressure from private clinics. Considering the reform implemented in France between 2005 and 2008, we find empirical evidence supporting these predictions: the activity increased up to 10% in public hospitals more exposed to competitive pressure from private clinics while it hardly raised by 4% in public hospitals less exposed to such a competitive pressure, in comparison with private clinics.
    Keywords: Health care markets, prospective payment system, local competition, not-for-profit hospitals
    JEL: I11 I18 L33
    Date: 2013
  5. By: LAURENCE SEIDMAN (Department of Economics,University of Delaware)
    Abstract: Medicare for seniors has been evolving for half a century and has performed very satisfactorily. Extending Medicare to cover everyone regardless of age would have several advantages. It would provide automatic coverage and portability for everyone regardless of employment, health status, income, marital status, or residential location. It would use single-payer bargaining power to reduce medical cost as a percent of GDP. It would eliminate the burden imposed by private health insurance premiums. It would eliminate health insurance distraction for business managers, entrepreneurs, and job seekers, thereby improving the productivity of the U.S. economy. It would remove that implicit tax on entrepreneurship and job mobility that is imposed by a system of employer-provided private health insurance, and thereby achieve a welfare gain equal to the magnitude of this deadweight loss. It would also remove the implicit tax on having a high expected medical cost that is imposed on individuals by a system of individually-purchased private insurance, and thereby achieve what many citizens would judge to be an improvement in the equity. Medicare for All, however, would require a significant increase in taxes as a percent of GDP (roughly 8 percent of GDP—from 30 percent to 38 percent of GDP) to replace the elimination of private insurance premiums, and this tax increase would impose some efficiency cost on the economy. Moreover, Medicare for All might have harmful effects on medical care if the government uses its payer bargaining power to force down medical prices severely rather than moderately or if public tax resistance reduces earmarked revenue for medical care (as a percent of GDP) severely rather than moderately. Thus, if Medicare for All is adopted, it would be important to finance it with taxes that have moderate rather than severe efficiency costs, and to raise sufficient taxes so Medicare can pay prices that are high enough to avoid waiting lists and achieve high quality.
    Date: 2014
  6. By: Rietveld, C.A.; Groenen, P.J.F.; Koellinger, Ph.D.; van der Loos, M.J.H.M.; Thurik, A.R.
    Abstract: Overconfidence has been proposed as an explanation for excess market entry by entrepreneurs and low returns in entrepreneurial activities. However, establishing that entrepreneurs are more overconfident than non-entrepreneurs requires the use of representative population samples; in addition, econometric endogeneity issues in survey data must be addressed. To overcome these methodological challenges, we use a measure of overconfidence that employs self-reports of life expectancy. These self-reports are compared to actual life spans in a large sample of the US population. We show that entrepreneurs are indeed more overconfident than non-entrepreneurs. By using fixed-effects panel regression—and thus by exploiting the longitudinal nature of our data—we provide evidence that changes in entrepreneurial status are not associated with changes in subjective life expectancy. These two findings in combination offer evidence that overconfident individuals self- select into entrepreneurship.
    Keywords: entrepreneurship, life expectancy, overconfidence, selection, self-employment
    JEL: D21 L20
    Date: 2013–07–23
  7. By: Mebratie, A.D.; Van de Poel, E.; Debebe, Z.Y.; Abebaw Ejigie, D.; Alemu, G.; Bedi, A.S.
    Abstract: Between 2000 and 2011, Ethiopia rapidly expanded its health-care infrastructure recording an 18-fold increase in the number of health posts and a 7-fold increase in the number of health centers. However, annual per capita outpatient utilization has increased only marginally. The extent to which individuals forego necessary health care, especially why and who foregoes care are issues that have received little attention in the context of low-income countries. This paper uses five clinical vignettes covering a range of context-specific child and adult-related diseases to explore the health-seeking behavior of rural Ethiopian households. We find almost universal preference for modern care. There is a systematic relationship between socioeconomic status and choice of providers mainly for adult-related conditions with households in higher consumption quintiles more likely to seek care in health centers, private/NGO clinics as opposed to health posts. Similarly, delays in care-seeking behavior are apparent mainly for adult-related conditions. The differences in care seeking behavior between adult and child related conditions may be attributed to the recent spread of health posts which have focused on raising awareness of maternal and child health. Overall, the analysis suggests that the lack of health-care utilization is not driven by the inability to recognize health problems or due to a low perceived need for modern care but due to other factors.
    Keywords: Ethiopia, clinical vignettes, foregone care, health care seeking behavior
    Date: 2013–02–04
  8. By: Panda, P.; Chakraborty, A.; Dror, D.M.; Bedi, A.S.
    Abstract: This paper assesses insurance uptake in three community based health insurance (CBHI) schemes located in rural parts of two of India’s poorest states and offered through women’s self-help groups (SHGs). We examine what drives uptake, the degree of inclusive practices of the schemes, and the influence of health status on enrollment. The most important finding is that a household’s socio-economic status does not appear to substantially inhibit uptake. In some cases Scheduled Caste/ Scheduled Tribe (SC/ST) households are more likely to enroll. Second, households with greater financial liabilities find insurance more attractive. Third, access to the hospital insurance scheme (RSBY) does not dampen CBHI uptake, suggesting that the potential for greater development of insurance markets and products beyond existing ones would respond to a need. Fourth, recent episodes of illness and selfassessed health status do not influence uptake. Fifth, insurance coverage is prioritized within households, with the household head, the spouse of the household head and both male and female children of the household head, more likely to be insured as compared to other relatives. Sixth, offering insurance through women’s SHGs appears to mitigate concerns about the inclusiveness and sustainability of CBHI schemes. Given the pan-Indian spread of SHGs, offering insurance through such groups offers the potential to scale-up CBHI.
    Keywords: Bihar, Uttar Pradesh, community-based health insurance, enrollment, health microinsurance, rural India, self-help groups
    Date: 2013–03–30
  9. By: Mebratie, A.D.; Sparrow, R.A.; Alemu, G.; Bedi, A.S.
    Abstract: Due to the limited ability of publicly financed health systems in developing countries to provide adequate access to health care, community-based health financing has been proposed as a viable option. This has led to the implementation of a number of Community- Based Health Insurance (CBHI) schemes, in several developing countries. To assess the ability of such schemes in meeting their stated objectives, this study systematically reviews the existing empirical evidence on three outcomes – access to schemes, effect on health care utilization and effect on financial protection. In addition to collating and summarizing the evidence we analyse the link between key scheme design characteristics and their effect on outcomes and comment on the role that may be played by study characteristics in influencing outcomes. The review shows that the ultra-poor are often excluded and at the same time there is evidence of adverse selection. The bulk of the studies find that access to CBHI is associated with increased health care utilization, especially with regard to the use of relatively cheaper outpatient care services as opposed to inpatient care. The schemes also appear to mitigate catastrophic healthcare expenditure. There are clear links between scheme design and effectiveness suggesting the importance of involving the target population in designing and implementing CBHI schemes.
    Keywords: catastrophic health expenditure, community health insurance, low-income groups
    Date: 2013–10–30
  10. By: Raza, W.A.; Panda, P.; Van de Poel, E.; Dror, D.M.; Bedi, A.S.
    Abstract: In recent years, supported by non-governmental organizations (NGOs), a number of demand-driven community-based health insurance (CBHI) schemes have been functioning in rural India. These CBHI schemes may design their benefit packages according to local priorities. In this paper we examine healthcare seeking behavior among self-help group households, with a view to understanding the implications for benefit packages offered by such schemes. This study is based on data from rural locations in two of India’s poorest states.1 We find that the majority of respondents do access some form of care and that there is overwhelming use of private services. Within private services, non-degree allopathic providers (NDAP) also called rural medical practitioners account for a substantial share and the main reason to access such unqualified providers is their proximity. The direct cost of care does not appear to have a bearing on choice of provider. Given the importance of proximity in determining provider choices, several solutions could be foreseen, such as mobile medical tours to villages, and/or that insurance schemes consider coverage of transportation costs and reimbursement of foregone earnings.
    Keywords: Healthcare seeking behavior, Non-degree allopathic providers, Community-based Health Insurance schemes, Self-help group, India
    Date: 2013–12–10
  11. By: Derseh, A.; Sparrow, R.A.; Debebe, Z.Y.; Alemu, G.; Bedi, A.S.
    Abstract: In June 2011, the Government of Ethiopia rolled out a pilot Community Based Health Insurance (CBHI) scheme. This paper assesses scheme uptake. We examine whether the scheme is inclusive, the role of health status in inducing enrolment and the effect of the quality of health care on uptake. By December 2012, scheme uptake had reached an impressive 45.5 percent of target households. We find that a household’s socioeconomic status does not inhibit uptake and the most food-insecure households are substantially more likely to enrol. Recent illnesses, incidence of chronic diseases and self-assessed health status do not induce enrolment, while there is a positive link between past expenditure on outpatient care and enrolment. A relative novelty is the identification of the quality of health care on enrolment. We find that the availability of medical equipment and waiting time to see a medical professional play a substantial role in determining enrolment. Focus group discussions raise concerns about the behaviour of health care providers who tend to provide preferential treatment to uninsured households. Nevertheless, the start of the pilot scheme has been impressive and despite some concerns, almost all insured households indicate their intention to renew membership and more than half of uninsured households indicate a desire to enrol. While this augurs well, the estimates suggest that expanding uptake will require continued investments in the quality of health care.
    Keywords: communit based health insurance, adverse selection, social exclusion, Ethiopia
    Date: 2013–12–20
  12. By: SO Mirai
    Abstract: There has recently been increasing attention paid to cognitive behavioral therapy (CBT) as a treatment for depression, despite its limitations such as a shortage of therapists. Therefore, computerized-CBT (CCBT) was developed to overcome this issue. Within our meta-analysis of adult depression (So et al., 2013), a sub-analysis was conducted on 1) guidance, 2) generation, 3) the severity of depression, and 4) multimedia functions, followed by a systematic review of cost-benefit analyses. 1) The effectiveness of guided CCBT was nearly double (p
    Date: 2014–01
  13. By: Burkhauser, Richard V. (Cornell University); Daly, Mary C. (Federal Reserve Bank of San Francisco); McVicar, Duncan (Queen’s University-Belfast); Wilkins, Roger (University of Melbourne)
    Abstract: Unsustainable growth in program costs and beneficiaries, together with a growing recognition that even people with severe impairments can work, led to fundamental disability policy reforms in the Netherlands, Sweden, and Great Britain. In Australia, rapid growth in disability recipiency led to more modest reforms. Here we describe the factors driving unsustainable DI program growth in the U.S., show their similarity to the factors that led to unsustainable growth in these other four OECD countries, and discuss the reforms each country implemented to regain control over their cash transfer disability program. Although each country took a unique path to making and implementing fundamental reforms, shared lessons emerge from their experiences.
    JEL: H53
    Date: 2013–12–13
  14. By: Maria Kuecken (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris); Josselin Thuilliez (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne); Marie-Anne Valfort (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris)
    Abstract: We examine the middle-run eff ects of the Global Fund's malaria control programs on the educational attainment of primary schoolchildren in Sub-Saharan Africa. Using a quasi-experimental approach, we exploit geographic variation in pre-campaign malaria prevalence (malaria ecology) and variation in exogenous exposure to the timing and expenditure of malaria control campaigns, based on individuals' years of birth and year surveyed. In a large majority of countries (14 of 22), we find that the program led to substantial increases in years of schooling and grade level as well as reductions in schooling delay. These countries are those for which pre-campaign educational resources are the highest. Moreover, although by and large positive, we nd that the marginal returns of the Global Fund disbursements in terms of educational outcomes are decreasing. Our findings, which are robust to both the instrumentation of ecology and use of alternative ecology measures, have important policy implications on the value for money of malaria control eff orts.
    Keywords: Malaria, Sub-Saharan Africa, Education, Quasi-experimental
    Date: 2014–01–06
  15. By: Eric Lammers
    Keywords: hospitals; physicians , vertical integration, health information technology, transaction cost economics
    JEL: I
    Date: 2013–10–31
  16. By: Eric J. Lammers; Julia Adler-Milstein; Keith E. Kocher
    Keywords: Health Information Exchange, HIE, Emergency Departments, Health
    JEL: I
    Date: 2013–12–26
  17. By: John Bound (University of Michigan); Kyle J. Caswell (Urban Institute); Timothy Waidmann (Urban Institute)
    Abstract: Since the mid-1980s there has been dramatic growth in the number and fraction of DI and SSI beneficiaries with mental illness. With longer life expectancies and younger ages of disability onset than beneficiaries with physical impairments, their growth exerts added fiscal pressure on the programs. While not specifically focused on mental illness, fears of an increase in the duration (and thus prevalence) of disability claims that may result from this demographic shift have generated calls to tighten eligibility rules again. Using data from the Health and Retirement Study linked to SSA administrative records, we created statistically matched control groups of non-beneficiaries with severe mental illness. We then estimated the earnings, income, and health insurance coverage among rejected DI/SSI applicants with mental illness who have characteristics comparable to persons awarded benefits on the basis of mental impairments. We found that even after controlling for health and demographic characteristics, DI beneficiaries were substantially worse off than rejected applicants in terms of wealth and income. While these rejected applicants with mental illness were worse off than those with physical impairments, our findings suggests that the programs successfully select applicants with the greatest income needs, and that retrenchment could result in significant hardship.
    Date: 2013–08
  18. By: Nicole Maestas (RAND); Kathleen J. Mullen (RAND); Alexander Strand (Social Security Adminstration)
    Abstract: As health insurance becomes available outside of the employment relationship as a result of the Affordable Care Act (ACA), the cost of applying for Social Security Disability Insurance (SSDI)—potentially going without health insurance coverage during a waiting period totaling 29 months from disability onset—will decline for many people with employer-sponsored health insurance. At the same time, the value of SSDI and Supplemental Security Income (SSI) participation will decline for individuals who otherwise lacked access to health insurance. We study the 2006 Massachusetts healthcare reform to estimate the potential effects of the ACA on SSDI and SSI applications.
    Date: 2013–11
  19. By: John Karl Scholz (University of Wisconsin-Madison); Ananth Seshadri (University of Wisconsin-Madison)
    Abstract: We develop a rich model to study the complex interrelationship between health insurance and retirement decisions. The decision to retire depends on a number of factors including availability of health insurance, health shocks, pensions, Social Security, and how consumption and health interact in the utility function. We incorporate these features in a computational model of optimal wealth and retirement decisions, solving the model household-by-household using data from the HRS. We use the model to study two important SSA priority areas: first, to what extent do people remain in the labor force until age 65 in order to maintain health insurance for themselves (and after age 65 to maintain health insurance for their spouses)? Second, do early retirees have poorer health than others and does the availability of Medicare interact with their decision to claim benefits?
    Date: 2013–09
  20. By: Ethan M.J. Lieber (University of Chicago); Lee M. Lockwood (Northwestern University)
    Abstract: Many large government programs provide benefits in kind as opposed to in cash. Providing benefits in kind potentially distorts decisions and leads to a deadweight loss if recipients value the benefits less than a cost-equivalent cash transfer. Yet providing benefits in kind may have some offsetting benefits, especially in terms of improving the targeting of benefits to desired beneficiaries. We complete what is to our knowledge one of the first empirical studies of the costs and benefits of providing transfers in kind as opposed to in cash. We focus on the case of the US Medicaid program's provision of in kind home health care benefits. Three state Medicaid programs completed randomized experiments that converted the usual in-kind benefits into cash benefits for a randomly-selected subset of benefit recipients. We use the results of these experiments together with a variety of other evidence to estimate the costs and benefits of providing Medicaid home care benefits in kind. We find that in the case of Medicaid home care benefits, both the costs and benefits of providing transfers in kind as opposed to in cash are large. This suggests that alternative targeting mechanisms, if available, have the potential to significantly increase efficiency relative to traditional Medicaid policy.
    Date: 2013–10
  21. By: John Bound (University of Michigan); Helen Levy (University of Michigan); Lauren Hersch Nicholas (Johns Hopkins University and University of Michigan)
    Abstract: Are early Social Security claimers too sick to work? We linked Health and Retirement Study data to Medicare claims to study health care utilization at ages 65 and 70. We find that Social Security Disability Insurance recipients use more health care on average than those who never received DI. At age 65, Medicare spending on SSDI recipients was $4,440 less than spending on retirees who claimed Social Security benefits prior to Full Retirement Age (FRA) and $4,727 less than those claiming at FRA. Differences in Medicare spending persist at all points of the spending distribution. They are robust to a variety of methodological approaches including general linear models, quantile regression, and reweighting, and in specifications limiting comparisons to beneficiaries claiming benefits at initial EEA. Our results suggest that poor health may contribute to EEA claiming decisions, though this group is considerably healthier than those who were too disabled to work and qualified for DI benefits.
    Date: 2013–10
  22. By: Andrew M. Parker (RAND); Leandro S. Carvalho (RAND); Susann Rohwedder (RAND)
    Abstract: Recent advances in behavioral decision research, behavioral economics, and life-span development psychology provide leverage for expanding our understanding of the decision to retire earlier versus later. This report examines how cognitive abilities, perceptions about the future, and other psychological characteristics affect retirement decisions. We use existing and new data collected through the RAND-USC American Life Panel, including detailed assessments of fluid and crystallized intelligence, financial literacy, expectations for the future, future time perspective, and maximizing versus satisficing decision styles. We find those with high levels of cognitive ability are more likely to retire later, as are those with greater longevity expectations. We also find those with lower cognitive ability have less coherent expectations of retirement—suggesting a need for planning assistance. We also find expectation of lower Social Security benefits is associated with plans to retire later—contrary to our hypothesis that such expectation might spur early retirement in an effort to lock in benefits. Finally, we find that tendencies maximize (versus satisfice) had mixed effects on retirement decision making, with different aspects of maximizing tendencies showing different relationships with retirement decision making. Future work should expand these data in a targeted direction. Recent research notes that decision-making competence can be improved with training, and to the extent this trainability extends to older adults, decision skills may be a useful target for intervention. Stronger longitudinal design and analysis can also help demonstrate possible endogenities between retirement and psychological variables.
    Date: 2013–09
  23. By: Talia Bar; Dean R. Lillard
    Abstract: We formally model direct to consumer advertising (DTCA) of prescription drugs and examine factors that determine a pharmaceutical firms DTCA strategy. We highlight how the profitability of DTCA varies with the characteristics of the condition that the advertised drug treats, the incidence of the condition, and the signal value of symptoms, and risk factors. We account for the potential information benefits from DTCA as well as its potential to persuade consumers. From a welfare perspective there can be too much or too little private investment in advertising. Welfare is more likely to increase when the population is uninsured.
    JEL: I18 L15 L65 M37
    Date: 2014–01
  24. By: Rong Hai (Becker Friedman Institute for Research in Economics, University of Chicago)
    Abstract: What has caused the rising gap in health insurance coverage by education in the U.S. over the last thirty years? How does the employment-based health insurance market interact with the labor market? What are the effects of social insurance such as Medicaid? By developing and structurally estimating an equilibrium model, I find that the interaction between labor market technological changes and the cost growth of medical services explains 60% to 70% of the gap. Using counterfactual experiments, I also evaluate the impact of further Medicaid eligibility expansion and employer mandates introduced in the Affordable Care Act on labor and health insurance markets.
    Keywords: Inequality, Human Capital, Health Insurance, Health Care Reform, Labor Market Equilibrium
    JEL: I13 J31 J32
    Date: 2013–01–16
  25. By: Manda, Constantine
    Abstract: Sex workers receive a price premium for unprotected sex. Research has inferred that the source of this premium is a compensating differential for STI risk. I introduce a compensating differential for pregnancy risk as a novel source through a simple model that incorporates both STI risk and pregnancy risk. I empirically test this using a rich panel dataset of 19,041 sexual transactions by 192 sex workers in Busia, Kenya collected during 2005 and 2006. I run sex worker-fixed effects regressions and find that compensating differentials for STI risk and pregnancy risk are sources of the price premium for unprotected sex. The price premium for pregnancy risk is USD 10, and USD 2 for STI risk (24 percent of average price). I also test for clients' disutility for condoms, another competing theory, and find that it is not a statistically significant source of the premium. Identifying and estimating sources of the price premium for unprotected sex will allow policymakers to implement interventions that will reduce both the supply and the demand for unprotected sex.
    Keywords: Price premium, unprotected sex, STI, pregnancy.
    JEL: I1 I10 J30 O12
    Date: 2013–12–06
  26. By: Lau, Marco Chi Keung; Fung, Ka Wai Terence
    Abstract: This paper attempts to examine the convergence hypothesis of health care expenditure per capita of 14 European Union (EU) countries during the 1975–2008 period by applying the Cerrato et al., (2009) nonlinear panel unit root test. Although the conventional linear panel unit root tests reject the null uniformly, the Cerrato et al., (2009) test shows evidence that one cannot reject the null hypothesis of unit root for health care expenditures of each country relative to the EU average, after taking nonlinearity into account. Our results are robust using different reference countries. The empirical findings imply that the exisitng “ EU health policy reforms” and “ European law on health care provision” may not able to encourage greater health care convergence in EU.
    Keywords: Health care expenditures, Nonlinear Panel Unit Root Tests, EU Health Reform
    JEL: I0 I18
    Date: 2013
  27. By: Andres, Luis A.; Briceno, Bertha; Chase, Claire; Echenique, Juan A.
    Abstract: This paper estimates two sources of benefits related to sanitation infrastructure access on early childhood health: a direct benefit a household receives when moving from open to fixed-point defecation or from unimproved sanitation to improved sanitation, and an external benefit (externality) produced by the neighborhood's access to sanitation infrastructure. The paper uses a sample of children under 48 months in rural areas of India from the Third Round of District Level Household Survey 2007-08 and finds evidence of positive and significant direct benefits and concave positive external effects for both improved sanitation and fixed-point defecation. There is a 47 percent reduction in diarrhea prevalence between children living in a household without access to improved sanitation in a village without coverage of improved sanitation and children living in a household with access to improved sanitation in a village with complete coverage. One-fourth of this benefit is due to the direct benefit leaving the rest to external gains. Finally, all the benefits from eliminating open defecation come from improved sanitation and not other sanitation solutions.
    Keywords: Hygiene Promotion and Social Marketing,Health and Sanitation,Urban Water Supply and Sanitation,Early Child and Children's Health,Population Policies
    Date: 2014–01–01
  28. By: Daniele Bregantini; Jacco J.J. Thijssen
    Abstract: In this paper we propose a solution to the Bayesian problem of a decision maker who chooses, while observing trial evidence, an optimal stopping time at which either to invest in a newly developed health care technology or abandon research. We show how optimal stopping boundaries can be computed as a function of the observed cumulative net benefit derived from the new health care technology. At the optimal stopping time, the decision taken is optimal and the decision maker either invest or abandon the technology with consequent health benefits to patients. The model takes into account the cost of decision errors and explicitly models these in the payoff to the heath care system. The implications in terms of opportunity costs of decisions taken at sub-optimal time is discussed and put in the value of information framework. In a case study it is shown that the proposed method, when compared with traditional ones, gives substantial economic gains both in terms of QALYs and reduced trial costs.
    Keywords: Optimal stopping, HTA, Bayes, Value of Information
    JEL: C11 C12 C44
    Date: 2014–01

This nep-hea issue is ©2014 by Yong Yin. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.