nep-hea New Economics Papers
on Health Economics
Issue of 2014‒12‒08
seventeen papers chosen by
Yong Yin
SUNY at Buffalo

  1. Addiction and Network Influence By Michal Ksawery Popiel
  2. Body Mass Index of Adolescent and Adult Survivors of Pediatric Acute Lymphoblastic Leukemia By Nam, Gina; Kaul, Sapna; Nelson, Richard; Wu, Yelena; Wright, Jennifer; Fluchel, Mark; Kirchhoff, Anne
  3. Determinants of pharmaceutical innovation diffusion: social contagion and prescribing characteristics By Lublóy, Ágnes; Keresztúri, Judit Lilla; Benedek, Gábor
  4. Economic reasoning on the correlation between life expectancy and economic development: Exploring alternative routes By Wittmann, Nadine
  5. Efficiency of Hospitals in the Czech Republic: Conditional Efficiency Approach By Lenka Šastná; Jana Votápková
  6. Health Spending in Japan: Macro-Fiscal Implications and Reform Options By Masahiro Nozaki; Kenichiro Kashiwase; Ikuo Saito
  7. Health Status and Labor Force Participation: Evidence for Urban Low and Middle Income Individuals in Colombia By Ana María Iregui-Bohórquez; Ligia Alba Melo-Becerra; María Teresa Ramírez-Giraldo
  8. Impact of Government Spending on Education and Health in Sri Lanka : A Provincial Level Analysis By K.S. Apsara Mendis; Masaru Ichihashi
  9. Is Job Insecurity Making Australians Fat? Evidence from Panel Data on Perceived Risk of Job Loss By Currie, Phillippa; Smith, Trenton G.; Stillman, Steven
  10. Longevity, Age-Structure, and Optimal Schooling By Noël Bonneuil; Raouf Boucekkine
  11. Mental Health and Work: Achieving Well-integrated Policies and Service Delivery By Iris Arends; Niklas Baer; Veerle Miranda; Christopher Prinz; Shruti Singh
  12. Modelling Heaped Duration Data: An Application to Neonatal Mortality By Arulampalam, Wiji; Corradi, Valentina; Gutknecht, Daniel
  13. Self-regulation and Health By Henry Saffer
  14. Starving (or Fattening) the Golden Goose?: Generic Entry and the Incentives for Early-Stage Pharmaceutical Innovation By Lee Branstetter; Chirantan Chatterjee; Matthew J. Higgins
  15. The Effect of Job Loss on Health: Evidence from Biomarkers By Michaud, Pierre-Carl; Crimmins, Eileen; Hurd, Michael D.
  16. The War on Poverty's Experiment in Public Medicine: Community Health Centers and the Mortality of Older Americans By Martha J. Bailey; Andrew Goodman-Bacon
  17. Why is Infant Mortality Higher in the US than in Europe? By Alice Chen; Emily Oster; Heidi Williams

  1. By: Michal Ksawery Popiel (Queen's University)
    Abstract: Social networks are an important component in understanding the decision to consume addictive substances. They capture the role of limited access, peer influence, and social acceptance and tolerance. However, despite the empirical evidence of their role, they have been absent from theoretical models. This paper proposes a mechanism through which agents can influence each other in their decision to consume an addictive good. An agent's decision is sensitive to her state of addiction as well as to the composition of her neighbourhood. The model is consistent with the empirical evidence that peer influence can work in both ways: influencing an individual to use and helping them to quit. The structure of the network has important implications on the outcome of agents' decisions as well as the effectiveness of policies aimed at limiting use of addictive substances through deterrence. I provide a network-based explanation of why usage rates can vary across otherwise similar agents and show how in some situations encouraging network ties can lead to lower use while in others it can have the opposite effect. Furthermore, I explore the effect of networks on diffusion of addiction and, using simulations, find that addiction spreads faster in an environment where there are few strong links than in one with many weak links.
    Keywords: addiction, dual-self, networks, random utility
    JEL: C70 D01 I18
    Date: 2014–11
  2. By: Nam, Gina; Kaul, Sapna; Nelson, Richard; Wu, Yelena; Wright, Jennifer; Fluchel, Mark; Kirchhoff, Anne
    Keywords: meta analysis, body mass index, late effects, pediatric acute lymphoblastic leukemia, Health Economics and Policy,
    Date: 2014
  3. By: Lublóy, Ágnes; Keresztúri, Judit Lilla; Benedek, Gábor
    Abstract: This article studies the determinants of pharmaceutical innovation diffusion among specialists. To this end, it investigates the influences of six categories of factors—social embeddedness, socio-demography, scientific orientation, prescribing patterns, practice characteristics, and patient panel composition—on the use of new drugs for the treatment of type 2 diabetes mellitus in Hungary. Here, in line with international trends, 11 brands were introduced between April 2008 and April 2010, outperforming all other therapeutic classes. The Cox proportional hazards model identifies three determinants—social contagion (in the social embeddedness category) and prescribing portfolio and insulin prescribing ratio (in the prescribing pattern category). First, social contagion has a positive effect among geographically close colleagues—the higher the adoption ratio, the higher the likelihood of early adoption—but no influence among former classmates and scientific collaborators. Second, the wider the prescribing portfolio, the earlier the new drug uptake. Third, the lower the insulin prescribing ratio, the earlier the new drug uptake—physicians’ therapeutic convictions and patients’ socioeconomic statuses act as underlying influencers. However, this finding does not extend to opinion-leading physicians such as scientific leaders and hospital department and outpatient center managers. This article concludes by arguing that healthcare policy strategists and pharmaceutical companies may rely exclusively on practice location and prescription data to perfect interventions and optimize budgets.
    Keywords: Cox proportional hazards model, diffusion, pharmaceutical innovations, prescribing characteristics, social contagion
    JEL: C14 I19 O33
    Date: 2014–06–25
  4. By: Wittmann, Nadine
    Abstract: Regarding the connection between economic development and public health, the statistically evident correlation between a country's gross domestic product and life expectancy is widely discussed. An important aspect that keeps resurfacing in discussions on why the relationship between the latter appears to trail off or even reverse its sign once a certain gross domestic product level has been reached is that of increasing economic and social inequality of distribution within many industrialized nations. However, from an economics perspective, it seems as though further plausible explanations can be identified, whose origins are in part inherent to the special structural characteristics of the market for health but are also well known in the fields of political as well as natural resource economics. While many seminal publications focus on the demand for health, this paper takes a holistic approach toward modeling the health market, in order to account for the fact that health products are not only an input factor to people's health but also that people's health is an essential and heterogeneous input factor to health products suppliers' profit functions. Results show that this approach can substantially affect health market outcomes.
    Keywords: market for health,market structure,public health,life expectancy,economic development
    JEL: D40 I14 I15 I18
    Date: 2014
  5. By: Lenka Šastná (Institute of Economic Studies, Faculty of Social Sciences, Charles University in Prague, Smetanovo nábreží 6, 111 01 Prague 1, Czech Republic); Jana Votápková (Institute of Economic Studies, Faculty of Social Sciences, Charles University in Prague, Smetanovo nábreží 6, 111 01 Prague 1, Czech Republic)
    Abstract: The paper estimates cost efficiency of 81 general hospitals in the Czech Republic during 2006-2010. We employ the conditional order-m approach which is a nonparametric method for efficiency computation accounting for environmental variables. E ffects of environmental variables are assessed using the non-parametric signicance test and partial regression plots. We find not-for-prot ownership and a presence of a specialized center in a hospital to be detrimental to hospital performance in the group of small and medium hospitals, while not-for-prot ownership is favorable to eciency for big hospitals. Generally, hospital performance gets worse in period 2009-2010 because additional revenues received in form of user charges which were introduced in 2008 increase spending of hospitals. Only big hospitals proved to take some cost-saving measures as a reaction to nancial crisis.
    Keywords: Efficiency, hospitals, conditional order-m FDH, Czech Republic
    JEL: D24 I11
    Date: 2014–09
  6. By: Masahiro Nozaki; Kenichiro Kashiwase; Ikuo Saito
    Abstract: Health spending has risen rapidly in Japan. We find two-thirds of the spending increase over 1990–2011 resulted from ageing, and the rest from excess cost growth. The spending level will rise further: ageing alone will raise it by 3½ percentage points of GDP over 2010–30, and excess cost growth at the rate observed over 1990–2011 will lead to an additional increase of 2–3 percentage points of GDP. This will require a sizable increase in government transfers. Japan can introduce micro- and macro-reforms to contain health spending, and financing options should be designed to enhance equity.
    Keywords: Health care spending;Japan;Aging;Fiscal policy;Public health;Fiscal reforms;Japan, health spending, long-term care, fiscal policy
    Date: 2014–08–04
  7. By: Ana María Iregui-Bohórquez; Ligia Alba Melo-Becerra; María Teresa Ramírez-Giraldo
    Abstract: This paper uses the first wave of the Colombian Longitudinal Survey (ELCA) to analyze the relationship between individual health status and labor force participation. The empirical modeling strategy accounts for the presence of potential endogeneity between these two variables. The results show that there is a positive relationship between health and labor force participation in both directions, indicating that better health is likely to lead to a higher probability of participation in the labor market, and also that those who are in the labor market are more likely to report better health. Moreover, interesting differences arise when the database is further divided by gender and/or age groups. Our findings highlight the importance of public policy to guarantee good health conditions of the population which could also have a positive impact on labor productivity and consequently on long-run economic growth. Classification JEL: C35, C36, I10, J21
    Date: 2014–11
  8. By: K.S. Apsara Mendis (Graduate School for International Development and Cooperation, Hiroshima University); Masaru Ichihashi (Graduate School for International Development and Cooperation, Hiroshima University)
    Abstract: This study examines the impact of government spending on educational and healthcare development outcomes at the provincial level in Sri Lanka with the objectives of (1) to investigate the impact of government expenditure on education in terms of the student failure rate at the provincial level; (2) to investigate the impact of government expenditure on health in terms of infant mortality rate at the provincial level; (3) investigate the performance of other provinces in terms of social outcomes compare with that of Western Province and recommends policy implications based on the results. Panel data analysis technique has been utilized for the data set of seven provinces2 of Sri Lanaka for the period of 1995 to 2011. The empirical results imply that government spending by provincial councils does have an effect on student failure rates and infant mortality rates. But with the presence of other regional factors the quality of government spending is questionable. These findings are confirmed by the previous research in this field such as Rajkumar and Swaroop (2008), Baldacci, et al. (2008). Moreover, the performance of provinces in education and health sectors are varied with reference to Western Province. To attain the goals of education and healthcare sectors, the sum of government spending is not always what matters, but the quality. Therefore the provincial councils should not depend entirely on increasing the allocation of budget to improve the outcomes. Implementing monitoring and evaluation systems would be advantageous in advancing the effectiveness and quality of provincial budget allocation.
    Keywords: Government spending, Human Capital, Education, Health, GDP, Sri Lanka
    JEL: I15 I22 O15
    Date: 2014–11
  9. By: Currie, Phillippa; Smith, Trenton G.; Stillman, Steven
    Keywords: Consumer/Household Economics, Food Consumption/Nutrition/Food Safety, Food Security and Poverty, Institutional and Behavioral Economics, Risk and Uncertainty,
    Date: 2014
  10. By: Noël Bonneuil (Institut national d’études démographiques, EHESS); Raouf Boucekkine (Aix-Marseille University (Aix-Marseille School of Economics), CNRS & EHESS, senior member, Institut universitaire de France)
    Abstract: The mechanism stating that longer life implies larger investment in human capital, is premised on the view that individual decision-making governs the relationship between longevity and education. This relationship is revisited here from the perspective of optimal period school life expectancy, obtained from the utility maximization of the whole population characterized by its age structure and its age-specific fertility and mortality. Realistic life tables such as model life tables are mandatory, because the age distribution of mortality matters, notably at infant and juvenile ages. Optimal period school life expectancy varies with life expectancy and mortality. Applications to stable population models and then to French historical data from 1806 to nowadays show that the population age structure has indeed modified the relationship between longevity and optimal schooling.
    Keywords: longevity, schooling, school life expectancy, age structure
    Date: 2014–11
  11. By: Iris Arends; Niklas Baer; Veerle Miranda; Christopher Prinz; Shruti Singh
    Abstract: Mental ill-health can lead to poor work performance, high sickness absence and reduced labour market participation, resulting in considerable costs for society. Improving labour market participation of people with mental health problems requires well-integrated policies and services across the education, employment, health and social sectors. This paper provides examples of policy initiatives from 10 OECD countries for integrated services. Outcomes and strengths and weaknesses of the policy initiatives are presented, resulting in the following main conclusions for future integrated mental health and work policies and services: More rigorous implementation and evaluation of integrated policies is necessary to improve labour market outcomes. Implementation cannot be left to the discretion of stakeholders only; Better financial incentives and clearer obligations and guidelines need to be provided to stakeholders and professionals to participate in integrated service delivery; Each sector has a responsibility to assure integrated services in line with client needs, in turn requiring much better knowledge about the needs of clients with a mental illness; More integrated provision of services within each sector – e.g. through employment advice brought into the mental health system and psychological expertise brought into employment services – appears to be the easiest and most cost-effective approach.<BR>La mauvaise santé mentale peut conduire à une moindre performance au travail, une forte incidence de l’absentéisme pour maladie et un taux d’activité réduit, ce qui entraîne des coûts considérables pour la société. Améliorer la participation sur le marché du travail des personnes ayant des troubles mentaux exige des politiques et des services intégrés dans les domaines de l’éducation, l'emploi, la santé et les secteurs sociaux. Ce rapport propose des exemples d'initiatives politiques provenant de 10 pays de l'OCDE pour des services intégrées et présente leurs résultats ainsi que les points forts et les faiblesses. Les principales conclusions pour l'avenir des politiques et des services intégrés dans les domaines de santé mentale et de l’emploi sont les suivantes: Une mise en oeuvre et une évaluation plus rigoureuse des politiques intégrées sont nécessaires pour améliorer les résultats du marché du travail. La mise en oeuvre ne peut pas être laissée à la discrétion des parties concernés seulement ; Le renforcement des incitations financières et des obligations et des lignes directrices plus claires doivent être fournis aux parties concernés et aux professionnels pour participer à la prestation de services intégrés ; Chaque secteur a la responsabilité d'assurer des services intégrés en fonction des besoins des clients, ce qui exige à son tour une meilleure connaissance des besoins des clients avec des troubles mentaux ; Plus de prestations de services intégrés au sein de chaque secteur – par exemple des conseils de l'emploi incorporés dans le système de santé mentale et de l'expertise psychologique incorporé dans les services de l'emploi – semble être l'approche la plus simple et la plus rentable.
    JEL: I18 I28 I38 J18 J28
    Date: 2014–11–20
  12. By: Arulampalam, Wiji (Warwick University); Corradi, Valentina (Surrey University); Gutknecht, Daniel (Oxford University)
    Abstract: In 2005, the Indian Government launched a conditional cash-incentive program to en- courage institutional delivery. This paper studies the eects of the program on neonatal mortality using district-level household survey data. We model mortality using survival analysis, paying special attention to the substantial heaping present in the data. The main objective of this paper is to provide a set of sucient conditions for identication and consistent estimation of the baseline hazard accounting for heaping and unobserved heterogeneity. Our identication strategy requires neither administrative data nor mul- tiple measurements, but a correctly reported duration and the presence of some at segments in the baseline hazard which includes this correctly reported duration point. We establish the asymptotic properties of the maximum likelihood estimator and pro- vide a simple procedure to test whether the policy had (uniformly) reduced mortality. While our empirical ndings do not conrm the latter, they do indicate that accounting for heaping matters for the estimation of the baseline hazard.
    Keywords: Discrete Time Duration Model, Heaping, Measurement Error, Parameters on the Boundary, Neonatal Mortality.
    Date: 2014
  13. By: Henry Saffer
    Abstract: The purposes of this paper are to measure self-regulation, to investigate whether self-regulation differs across different health related choices, to estimate its effect on health choices and to estimate the effect of self-regulation on health-demographic gradients. The theory and empirical approach to self-regulation employed in this paper relies on a broad literature which includes economics, psychology and experimental studies. In addition, a novel empirical approach is employed to create a single measure of self-regulation that can vary across domains. A single measure of self-regulation in place of a set of proxy variables allows for the study of how self-regulation is correlated across different health choices. The results show that there is a high correlation in self-regulation for smoking, drinking, drug use, crime and gambling, but that self-regulation for BMI (body mass index) and obesity are different than self-regulation for the other outcomes. The results show that self-regulation has a significant negative effect on all choices. The results also show that self-regulation generally reduces the effect of education on health but education retains a negative and significant relationship with all outcomes. The research presented in this paper also raises questions about the effect of omitted individual heterogeneity in measuring the effects of public policy.
    JEL: I1
    Date: 2014–09
  14. By: Lee Branstetter; Chirantan Chatterjee; Matthew J. Higgins
    Abstract: Over the last decade, generic penetration in the U.S. pharmaceutical market has increased substantially, providing significant gains in consumer surplus. What impact has this rise in generic penetration had on the rate and direction of early stage pharmaceutical innovation? We explore this question using novel data sources and an empirical framework that models the flow of early-stage pharmaceutical innovations as a function of generic penetration, scientific opportunity, firm innovative capability, and additional controls. While the aggregate level of early-stage drug development activity has increased, our estimates suggest a sizable, robust, negative relationship between generic penetration and early-stage pharmaceutical research activity within therapeutic markets. A 10% increase in generic penetration is associated with a 7.9% decline in all early-stage innovations in the same therapeutic market. When we restrict our sample to first-in-class pharmaceutical innovations, we find that a 10% increase in generic penetration is associated with a 4.6% decline in early-stage innovations in the same market. Our estimated effects appear to vary across therapeutic classes in sensible ways, reflecting the differing degrees of substitution between generics and branded drugs in treating different diseases. Finally, we are able to document that with increasing generic penetration, firms in our sample are shifting their R&D activity to more biologic-based (large-molecule) products rather than chemical-based (small-molecule) products. We conclude by discussing the potential implications of our results for long-run welfare, policy, and innovation.
    JEL: D2 L5 L51 L65 M2
    Date: 2014–09
  15. By: Michaud, Pierre-Carl (University of Québec at Montréal); Crimmins, Eileen (University of Southern California); Hurd, Michael D. (RAND)
    Abstract: The effect of job loss on health may play an important role in the development of the SES-health gradient. In this paper, we estimate the effect of job loss on objective measures of physiological dysregulation using longitudinal data from the Health and Retirement Study and biomarker measures collected in 2006 and 2008. We use a variety of econometric methods to account for selection and reverse causality. Distinguishing between layoffs and business closures, we find no evidence that business closures lead to worse health outcomes. We also find no evidence that biomarker health measures predict subsequent job loss because of business closures. We do find evidence that layoffs lead to diminished health. Although this finding appears to be robust to confounders, we find that reverse causality tends to bias downward our estimates. Matching estimates, which account for self-reported health conditions prior to the layoff and subjective job loss expectations, suggest even stronger estimates of the effect of layoffs on health as measured from biomarkers, in particular for glycosylated hemoglobin (HbA1c) and C-reactive protein (CRP). Overall, we estimate that a layoff could increase annual mortality rates by 9.4%, which is consistent with other evidence of the effect of mass layoffs on mortality.
    Keywords: job loss, health, SES-health gradient, biomarkers
    JEL: I14 J10 J14
    Date: 2014–10
  16. By: Martha J. Bailey; Andrew Goodman-Bacon
    Abstract: This paper uses the rollout of the first Community Health Centers (CHCs) to study the longer-term health effects of increasing access to primary care. Within ten years, CHCs are associated with a reduction in age-adjusted mortality rates of 2 percent among those 50 and older. The implied 7 to 13 percent decrease in one-year mortality risk among beneficiaries amounts to 20 to 40 percent of the 1966 poor/non-poor mortality gap for this age group. Large effects for those 65 and older suggest that increased access to primary care has longer-term benefits, even for populations with near universal health insurance.
    JEL: I28 I3 J14 J18
    Date: 2014–10
  17. By: Alice Chen; Emily Oster; Heidi Williams
    Abstract: The US has a substantial - and poorly understood - infant mortality disadvantage relative to peer countries. We combine comprehensive micro-data on births and infant deaths in the US from 2000 to 2005 with comparable data from Austria and Finland to investigate this disadvantage. Differential reporting of births near the threshold of viability can explain up to 40% of the US infant mortality disadvantage. Worse conditions at birth account for 75% of the remaining gap relative to Finland, but only 30% relative to Austria. Most striking, the US has similar neonatal mortality but a substantial disadvantage in postneonatal mortality. This postneonatal mortality disadvantage is driven almost exclusively by excess inequality in the US: infants born to white, college-educated, married US mothers have similar mortality to advantaged women in Europe. Our results suggest that high mortality in less advantaged groups in the postneonatal period is an important contributor to the US infant mortality disadvantage.
    JEL: I0 I14
    Date: 2014–09

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