nep-hea New Economics Papers
on Health Economics
Issue of 2014‒09‒05
four papers chosen by
Yong Yin
SUNY at Buffalo

  1. The Effect of Income on Obesity among Canadian Adults By Koffi-Ahoto Kpelitse; Rose Anne Devlin; Sisira Sarma
  2. Patient Cost-Sharing and Healthcare Utilization in Early Childhood: Evidence from a Regression Discontinuity Design By Hsing-Wen Han; Hsien-Ming Lien; Tzu-Ting Yang
  4. Within-Mother Estimates of the Effects of WIC on Birth Outcomes in New York City By Janet Currie; Ishita Rajani

  1. By: Koffi-Ahoto Kpelitse; Rose Anne Devlin; Sisira Sarma
    Abstract: Although a large body of research demonstrates an association between income and obesity, the causal nature of this relationship remains largely unclear. Using five biennial confidential master files (2000/01-2009/10) of the Canadian Community Health Survey, we examine the causal effect of income on adult body mass index (BMI) and obesity in Canada using an instrumental variables (IV) approach. The neighbourhood level unemployment rate and household income are the instruments used to identify the causal effect. Our results show that the income elasticity of BMI is -0.113 for women and -0.027 for men. These findings suggest that for a person of average height, a 1% increase in income leads to a weight reduction of 0.300 kg and 0.084kg for women and men, respectively. We find that a 1% increase in household income leads to a 0.76% and 0.27% decrease in the probability of being obese for women and men, respectively. Our quantile IV results reveal that the negative effect of income on BMI increases consistently over the BMI distribution in women, while for men it is statistically significant only at the higher end of the BMI distribution. Contrary to theoretical expectations, we do not find any evidence of a larger negative effect of income on BMI and obesity for more educated people. Our findings suggest that household income is potentially an important modifiable risk factor for obesity, especially among women.
    Keywords: body mass index, obesity, income, Instrumental Variable (IV), Quantile IV, Canada
    JEL: I1 I2 I10 C2
    Date: 2014–08
  2. By: Hsing-Wen Han; Hsien-Ming Lien; Tzu-Ting Yang
    Abstract: Healthcare for young children is highly subsidized in many public health insurance programs around the world. However, the existing literature lacks evidence on how the demand for young children's healthcare reacts to these medical subsidy policies. This paper exploits a sharp increase in patient cost-sharing at age 3 in Taiwan that results from young children "aging out" of the cost sharing subsidy. This price shock on the 3rd birthday allows us to use a regression discontinuity design to examine the causal effect of cost sharing on the demand for young children's healthcare by comparing the expenditure and utilization of healthcare for young children right before and after the 3rd birthday. Our results show that the increased patient cost sharing at the 3rd birthday significantly reduces total outpatient expenditure. The implied arc-elasticity of outpatient expenditure is around -0.10. However, the demand for inpatient care for young children does not respond to a change in cost sharing at the 3rd birthday even though the price variation is much larger. This result implies that the full coverage of inpatient care could improve the welfare of young children.
    Keywords: patient cost-sharing, health insurance, children health
    JEL: G22 I12 I18 J13
    Date: 2014–08
  3. By: Judith Kabajulizi
    Abstract: 1. Rationale/Objective Evaluation of healthcare reforms has been an integral part of healthcare system studies. In Uganda the effectiveness of the healthcare reforms that were systematically undertaken since 1992, has been widely studied. The partial equilibrium studies evaluating the reforms have concentrated on the economic impact to the health sector and impacts to the population’s health status. The functioning of the health sector generates cascade effects as it is interlinked with both productive labour supply and other sectors in the economy. The economy-wide impacts of healthcare reforms in Uganda have not been researched. The objective of this study is to assess the economy-wide impacts of changes in policies and strategies for healthcare provision in Uganda. Specifically, the study aims to: i) Present results from a dynamic computable general equilibrium (CGE) model for the Ugandan economy that includes healthcare reform effects. The aim is to represent the interaction of the healthcare system with the rest of the economy and incorporate key features of Uganda’s healthcare system in the model. ii) Present an updated Ugandan social accounting matrix (SAM) with a disaggregated health sector defined by three new accounts: non-government health, government primary health, and government other health. The aim of the enhanced SAM is also to capture health consumption expenditure by multiple households defined by residence and main economic activity (i.e. rural-farming, rural non-farming, urban-farming, urban-non-farming, Kampala-non-farming); and productive health sector labour by skill level (i.e. self-employed, unskilled, skilled). ii) Determine the impact of changes in healthcare policies and strategies on: a) factors of production; b) households; c) non-healthcare sectors; and d) macroeconomic indicators. iv) Assess how policies aimed at improving healthcare delivery compare. 2. Design and methods: The analysis is based on a dynamic computable general equilibrium model of Uganda calibrated to the enhanced Uganda 2007 social accounting matrix. The CGE method of evaluation is a move from the narrow internal focus on the health sector to wider national effects. Additionally, the study is in a developing country setting and hence lessons to draw on the likely macroeconomic impacts of healthcare reforms for low- and middle-income countries generally. 2.1 The Uganda social accounting matrix The Uganda SAM 2007 is a 122 by 122 matrix representing 50 sectors (comprising of agriculture, industry, and services); 6 factors of production (labour, livestock capital, physical capital, and land); and 8 institutions (enterprises, government, multiple households, and the rest of the world). My role in this pre-existing Uganda SAM 2007 is to disaggregate the health sector into three new accounts namely non-government-health, government-primary-health, and government-other-health; and balance the new SAM. While creating the new accounts, aggregate totals from the original SAM are preserved (that is, shares are used from other sources rather than actual numbers). Household health consumption expenditure and health sector labour supply shares are derived from the Uganda national household survey (UNHS) 2005 and the UNHS 2005 labour survey module respectively. Shares for capital and health intermediate inputs are derived from the national accounts and government health expenditure for 2007/2008; government health consumption shares are taken from the government medium term expenditure framework (MTEF) 2006/2007. 2.2 The model The analysis is based on a recursive dynamic model to capture the dynamics of health policy changes in the economy. The Labour force growth rates for the different policy simulations are exogenously supplied from a demographic model. I present two policy scenarios representing exogenous changes in the economic conditions of the country, which are compared to a baseline scenario of business as usual. The base run is for the period 2010-2025 and assumes government budget allocation remains the same throughout the model period. The first simulation considers reallocation of resources to the health sector. Thus, the base year government health expenditure is raised by some percentage (informed by the literature), as a share of GDP. In the second experiment, the reallocation of resources to health sector is coupled with improved efficiency in the use of resources. Thus, I increase health expenditure by some percentage from the base, with increased factor productivity in the health sector (both total factor productivity and health specific factor productivity). 3. Results/Expected Results The creation of three new health accounts (out of the original single account) in the Uganda SAM 2007 is my innovation. Specifically, the health sector is now represented by non-government-health, government-primary-health, and government-other-health. The scenarios described above are a work in progress and final results will be presented in the full conference paper.
    Keywords: UGANDA, General equilibrium modeling, Developing countries
    Date: 2013–06–21
  4. By: Janet Currie; Ishita Rajani
    Abstract: There is a large literature suggesting that “WIC works” to improve birth outcomes. However, methodological limitations related to selection into the WIC program have left room for doubt about this conclusion. This paper uses birth records from New York City to address the limitations of the previous literature. We estimate models with mother fixed effects to control for fixed characteristics of mothers and we directly investigate the way that time-varying characteristics of mothers affect selection into the WIC program. We find that WIC is associated with reductions in low birth weight, even among full term infants, and with reductions in the probability that a child is “small for dates.” These improvements are associated with a reduction in the probability that the mother gained too little weight during pregnancy. Improvements tend to be largest for first born children. We also find that women on WIC are more likely to be diagnosed with chronic conditions, and receive more intensive medical services, a finding that may reflect improved access to medical care.
    JEL: I1 I12 I3
    Date: 2014–08

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