nep-hea New Economics Papers
on Health Economics
Issue of 2018‒09‒03
twenty-one papers chosen by
Nicolas R. Ziebarth
Cornell University

  1. Does Prenatal WIC Participation Improve Child Outcomes? By Anna V. Chorniy; Janet Currie; Lyudmyla Sonchak
  2. Violence While in Utero: The Impact of Assaults during Pregnancy on Birth Outcomes By Currie, Janet; Mueller-Smith, Michael; Rossin-Slater, Maya
  3. Effects of Prenatal Care on Birth Outcomes: Reconciling a Messy Literature By Hope Corman; Dhaval M. Dave; Nancy Reichman
  4. Estimating Causal Effects of Alcohol Access and Use on a Broad Set of Risky Behaviors: Regression Discontinuity Evidence By Fletcher, Jason M.
  5. Preferred Pharmacy Networks and Drug Costs By Amanda Starc; Ashley Swanson
  6. Quantifying the Benefits of Social Insurance: Unemployment Insurance and Health By Kuka, Elira
  7. Labor Market Screening and Social Insurance Program Design for the Disabled By Naoki Aizawa; Serena Rhee; Soojin Kim
  8. Health and Economic Activity Over the Lifecycle: Literature Review By Daniel Prinz; Michael Chernew; David Cutler; Austin Frakt
  9. The Influence of Food Store Access on Grocery Shopping and Food Spending By Ver Ploeg, Michele; Larimore, Elizabeth; Wilde, Parke E.
  10. U.S. Trends in Food Availability and a Dietary Assessment of Loss-Adjusted Food Availability, 1970-2014 By Bentley, Jeanine
  11. Health Disparities for Immigrants: Theory and Evidence from Canada By Lebihan, Laetitia; Mao Takongmo, Charles Olivier; McKellips, Fanny
  12. Does Television Kill Your Sex Life? Microeconometric Evidence from 80 Countries By Adrienne Lucas; Nicholas Wilson
  13. Private health insurance in Germany and Chile: two stories of co-existence, segmentation and conflict By Roman-Urrestarazu, Andres; Yang, Justin C.; Ettelt, Stefanie; Thalmann, Inna; Seguel Ravest, Valeska; Brayne, Carol
  14. My Choice: Female Contraceptive Use Autonomy in Bangladesh By Blunch, Niels-Hugo
  15. Polygyny, Child Education, Health and Labour: Theory and Evidence from Mali By DIARRA, Setou; LEBIHAN, Laetitia; MAO TAKONGMO, Charles Olivier
  16. Aging, disability and disease in India By Veena S. Kulkarni, Vani S. Kulkarni and Raghav Gaiha
  17. Air pollution and health - A provincial level analysis of China By Wei Zheng; Patrick Paul Walsh
  18. Measuring Access to Nutritious Diets in Africa: Novel Price Indexes for Diet Diversity and the Cost of Nutrient Adequacy By Masters, William A.; Bai, Yan; Herforth, Anna; Sarpong, Daniel; Mishili, Fulgence; Kinabo, Joyce; Coates, Jennifer C.
  19. Possible health and growth implications of prostitution in Nigeria: A theoretical perspective By Sulaimon, Mubaraq Dele; Muhammad, Adamu Auwal; Shofoyeke, Oluwafunmilayo
  20. Enhancing Public Health Outcomes in Developing Countries: From Good Policies annd Best Practices to Better Implementation By Woolcock, Michael
  21. Willingness to pay for health insurance in the informal sector of Sierra Leone By Jofre-Bonet, Mireia; Kamara, Joseph

  1. By: Anna V. Chorniy; Janet Currie; Lyudmyla Sonchak
    Abstract: Large literatures document positive effects of WIC on birth outcomes, and separately connect health at birth and future outcomes. But little research investigates the link between prenatal WIC participation and childhood outcomes. We explore this question using a unique data set from South Carolina which links administrative birth, Medicaid, and education records. We find that relative to their siblings, prenatal WIC participants have a lower incidence of ADHD and other common childhood mental health conditions and of grade repetition. These findings demonstrate that a “WIC start” results in persistent improvements in child outcomes across a range of domains.
    JEL: I18 I38
    Date: 2018–06
  2. By: Currie, Janet (Princeton University); Mueller-Smith, Michael (University of Michigan); Rossin-Slater, Maya (Stanford University)
    Abstract: Causal evidence of the effects of violent crime on its victims is sparse. Yet such evidence is needed to determine the social cost of crime and to evaluate the cost-effectiveness of policy interventions in the justice system. This study presents new evidence on the effects of violent crime on pregnancy and infant health outcomes, using unique linked administrative data from New York City. We merge birth records with maternal residential addresses to the locations of reported crimes, and focus on mothers who lived in a home where an assault was reported during their pregnancies. We compare these mothers to women who lived in a home with an assault that took place shortly after the birth. We find that assaults in the 3rd trimester significantly increase rates of very low birth weight (less than 1,500 grams) and very pre-term (less than 34 weeks gestation) births, possibly through a higher likelihood of induced labor. We show that our results are robust to multiple choices of control groups and to using maternal fixed effects models. We calculate that these impacts translate into a social cost per assault during pregnancy of $41,771, and a total annual cost of over $4.25 billion when scaled by the national victimization rate. As infant health is a strong predictor of life-long well-being, and women of lower socioeconomic status are more likely to be victims of domestic abuse than their more advantaged counterparts, our results suggest that in utero subjection to violent crime is an important new channel for intergenerational transmission of inequality.
    Keywords: domestic violence, infant health, pregnancy, health inequality, social cost of crime
    JEL: I14 I31 J12 J13 K14
    Date: 2018–07
  3. By: Hope Corman; Dhaval M. Dave; Nancy Reichman
    Abstract: Research on the effects of prenatal care on birth outcomes has produced a patchwork of findings that are not easily summarized. Studies have used varying definitions of prenatal care, leading to estimates that are difficult to compare. The identification of causal effects is particularly challenging in this literature because women enter pregnancy with varying states of health, resources and the desire to have a child and it is not feasible to conduct randomized controlled trials that deny care. The content and quality of prenatal care can vary, even across individuals initiating care at the same point in their pregnancies and with similar medical and psychosocial issues. In this chapter, we review the literature on the effects of prenatal care on birth outcomes, highlighting studies with strong research designs and plausible effect sizes. We reconcile the findings to the extent possible, summarize what is known to date, and point to potentially fruitful research directions going forward.
    JEL: I12 I14 I18
    Date: 2018–08
  4. By: Fletcher, Jason M. (University of Wisconsin-Madison)
    Abstract: A growing body of evidence suggests large increases in criminal behavior and mortality coinciding with a young adult's 21st birthday, when alcohol consumption becomes legal. The policy implications from these findings have focused on the need to reduce drinking among young people, potentially by enforcing stricter alcohol controls. However, mortality and arrests are relatively infrequent outcomes and relatively less is known about the intermediate and more prevalent consequences of legal access to alcohol at age 21. This paper uses the Add Health data combined with a regression discontinuity approach to examine the effects of alcohol access on sexual behavior, drunk driving, violence, and other outcomes. The results suggest relatively large effects that appear concentrated in men. The sample also allows some suggestive policy implications on whether changing the minimum drinking age may reduce these consequences.
    Keywords: minimum legal drinking age, regression discontinuity, risky behaviors
    JEL: I12 I18
    Date: 2018–06
  5. By: Amanda Starc; Ashley Swanson
    Abstract: Selective contracting is an increasingly popular tool for reducing health care costs, but these savings must be weighed against consumer surplus losses from restricted access. In both public and private prescription drug insurance plans, issuers utilize preferred pharmacy networks to reduce drug prices. We show that, in the Medicare Part D program, drug plans with more restrictive preferred pharmacy networks, and plans with fewer enrollees who are insensitive to preferred pharmacy discounts on copays, pay lower retail drug prices. We then use estimates of plan and pharmacy demand to estimate the first-order costs and benefits of selective contracting in the presence of enrollees with heterogeneous sensitivity to preferred supplier incentives.
    JEL: I13 L1
    Date: 2018–07
  6. By: Kuka, Elira (Southern Methodist University)
    Abstract: While the Unemployment Insurance (UI) program is one of the largest safety net program in the U.S., research on its benefits is limited. This paper exploits plausibly exogenous changes in state UI laws to empirically estimate whether UI generosity mitigates any of the previously documented negative health effects of job loss. The results show higher UI generosity increases health insurance coverage and utilization, and leads to improved self-reported health. Moreover, these effects are stronger during periods of high unemployment rates. Finally, I find no effects on risky behaviors nor on health conditions.
    Keywords: unemployment insurance, health
    JEL: I1
    Date: 2018–06
  7. By: Naoki Aizawa (University of Minnesota); Serena Rhee (University of Hawaii Manoa); Soojin Kim (Purdue University)
    Abstract: This paper studies how to optimally design subsidies for disabled workers, accounting for both the worker- and firm-side responses in the labor market. We first provide empirical evidence that firms design job characteristics, such as the flexibility of work hours, to screen out disabled workers. Then, we develop an equilibrium labor market model where firms post a screening contract which consists of wage and job characteristics; and workers with different levels of disability make labor supply decisions. We estimate the model using the Health and Retirement Study data, and identify the key model parameters by exploiting the exogenous policy variation on employment (hiring) subsidies for the disabled. Using the estimated model, we quantify the policy impacts on workers’ labor supply and firms’ employment contract design. Then, we characterize the optimal mix of the disability insurance and employment (hiring) subsidies for the disabled and study their implications on equilibrium labor market outcomes for workers of different health statuses.
    Date: 2018
  8. By: Daniel Prinz; Michael Chernew; David Cutler; Austin Frakt
    Abstract: We systematically review the literature linking health to economic activity, particularly education and labor market outcomes, over the lifecycle. In the first part, we review studies that link childhood health to later-life outcomes. The main themes we focus on are in-utero exposures, birthweight, physical health and nutrition, mental health, and the environment. In the second part, we review studies of the impact of health on labor market success for adults. The main themes we focus on are the environment, disability, physical health shocks, within-household spillovers, cancer, and mental health.
    JEL: I1 I15
    Date: 2018–07
  9. By: Ver Ploeg, Michele; Larimore, Elizabeth; Wilde, Parke E.
    Abstract: Low access to food retailers selling healthy and affordable foods may lead to reliance on food retail venues that carry a limited range of foods. Reliance on smaller retail stores and restaurants may result in a poor diet and diet-related health problems. The U.S. Department of Agriculture’s National Household Food Acquisition and Purchase Survey contains abundant data for examining how access to food retailers influences where households get their food, including stores and restaurants, and how much they spend at each place. This research looks at households that do not use their own vehicle to travel to a store and live more than 0.5 mile from the nearest SNAP-authorized supermarket or superstore, likely barriers to accessing food. Using a national sample and a low-income subsample that includes participants of the Supplemental Nutrition Assistance Program (SNAP), the authors find evidence that access-burdened households have some distinct shopping patterns. They are less likely to visit a large store (supermarket, supercenter, or warehouse store) than households with a vehicle or close access (77 percent compared with 87 percent). While those with burdened access who do visit these venues do so less frequently, both groups average over two shopping events at these stores (2.4 events for access-burdened households compared with 2.8 for those with sufficient access). The differences in shopping frequency do not translate to less spending at these large stores as both access-burdened and sufficient-access households spend about 58 percent of their food budget there. Access-burdened households spend a greater share of their budget at food-at-home sources (73 percent) and a smaller percentage of their food at restaurants of all types (27 percent) than households with better access (63 and 37 percent, respectively). Overall spending patterns are similar for both SNAP participating and low-income nonparticipating households that are access-burdened compared with those who have sufficient access.
    Keywords: International Relations/Trade
    Date: 2017–10–18
  10. By: Bentley, Jeanine
    Abstract: This report examines the amount of food available for consumption and related food trends in the United States from 1970 to 2014 using the food availability data in the U.S. Department of Agriculture, Economic Research Service’s Food Availability (Per Capita) Data System. By comparing the loss-adjusted food availability data (a proxy for food consumption) with the dietary recommendations in the 2015-2020 Dietary Guidelines for Americans, the report also estimates whether Americans, on average, are at, above, or below dietary recommendations for fruit, vegetables, grains, protein foods, dairy, added fats and oils, and added sugars and sweeteners. The loss-adjusted food availability data are derived from the food availability data by adjusting for food spoilage, plate waste, and other losses to more closely approximate per capita consumption. The findings indicate that Americans' consumption, on average, is below the dietary recommendations for fruit, vegetables, and dairy and above the recommendations for grains, protein foods, added fats and oils, and added sugars and sweeteners on the basis of a 2,000-calorie-per-day diet. To meet these recommendations, Americans would need to lower their consumption of added fats, refined grains, and added sugars and sweeteners, and increase their consumption of fruit, vegetables, whole grains, seafood, and low-fat dairy products.
    Keywords: Agricultural and Food Policy, Consumer/Household Economics, Crop Production/Industries, Food Consumption/Nutrition/Food Safety, Health Economics and Policy, Livestock Production/Industries
    Date: 2017–01
  11. By: Lebihan, Laetitia; Mao Takongmo, Charles Olivier; McKellips, Fanny
    Abstract: Few empirical studies have been conducted to analyse the disparities in health variables affecting immigrants in a given country. To our knowledge, no theoretical analysis has been conducted to explain health disparities for immigrants between regions in the same country that differs in term of languages spoken and income. In this paper, we use the Canadian Community Health Survey (CCHS) to compare multiple health measures among immigrants in Quebec, immigrants in the rest of Canada and Canadian-born individuals. We propose a simple structural model and conduct an empirical analysis in order to assess possible channels that can explain the health disparities for immigrants between two regions of the same country. Our results show that well-being and health indicators worsen significantly for immigrants in Quebec, compared to their counterparts in the rest of Canada and Canadian-born individuals. Additional econometric analysis also shows that life satisfaction is statistically and significantly associated with health outcomes. The proposed structural model predicts that, when the decision to migrate to a particular area is based on income alone, and if the fixed costs associated with the language barrier are large, immigrants may face health issues.
    Keywords: Immigrants, Canadian-born, well-being, health, Quebec.
    JEL: I14 I3 I30 J10
    Date: 2018–06–13
  12. By: Adrienne Lucas; Nicholas Wilson
    Abstract: The canonical consumer demand model predicts that as the price of a substitute decreases, quantity demanded for a good decreases. In the case of demand for sexual activity and availability of alternative leisure activities, popular culture expresses this prediction as “television kills your sex life.” This paper examines the association between television ownership and coital frequency using data from nearly 4 million individuals in national household surveys in 80 countries from 5 continents. The results suggest that while television may not kill your sex life, it is associated with some sex life morbidity. Under our most conservative estimate, we find that television ownership is associated with approximately a 6% reduction in the likelihood of having had sex in the past week, consistent with a small degree of substitutability between television viewing and sexual activity. Household wealth and reproductive health knowledge do not appear to be driving this association.
    JEL: I12 I31 J13
    Date: 2018–08
  13. By: Roman-Urrestarazu, Andres; Yang, Justin C.; Ettelt, Stefanie; Thalmann, Inna; Seguel Ravest, Valeska; Brayne, Carol
    Abstract: Background In Germany and Chile, substitutive private health insurance has been shaped by its co-existence with statutory social health insurance. Despite differences in the way choice is available to users in the health insurance regimes of Chile and Germany, the way in which each country has managed choice between private health insurance and statutory social health insurance provides a unique opportunity to comparatively assess the consequences of such an arrangement that has been previously underexamined. Methods We conducted a Most Similar Systems Design comparative policy analysis of the co-occurring private health insurance and statutory social health insurance systems in Germany and Chile. We describe and review the origins and development of the German and Chilean health care insurance systems with an emphasis on the substitutive co-existence between private health insurance and statutory social health insurance. We provide a critique of the market performance of the private health insurance regime in each country followed by a comparative assessment of the impact of private health insurance on financial protection, equity, and risk segmentation. Results Segmentation of insurance markets in both Germany and Chile has had significant consequences for equity, fairness, and financial protection. Due to market failures in health insurance and differences in the regulatory frameworks governing public and private insurers, the choice of public or private coverage has produced strong incentives for private insurers to select for risks, compromising equity in health care funding, heightening the financial risk borne by public insurers and lowering incentives for private insurers to operate efficiently. Conclusions The degree of conflict arising from the substitutive parallel private health insurance system and the statutory social health insurance system varies between Germany and Chile, though policy goals remain similar. Recent reforms in both countries have attempted to improve the financial protection of the privately insured through regulation; nevertheless, concerns about risk segmentation remain largely unresolved.
    JEL: F3 G3
    Date: 2018–08–03
  14. By: Blunch, Niels-Hugo (Washington and Lee University)
    Abstract: Previous research has examined the incidence and correlates of contraceptive use and of several dimensions of female autonomy but only rarely the intersection of the two: female contraceptive use autonomy (CUA). Using a nationally representative household survey for two cohorts of married women, I examine female CUA incidence and correlates in Bangladesh focusing on the role of education. Female CUA is found to differ substantially across cohorts, with women from the younger cohort being far more likely to have complete autonomy over contraceptive use than women from the older cohort. Detailed decompositions reveal that the improvement in education across cohorts is the main correlate of the improved generational CUA gap. Health knowledge, especially knowledge that the use of condoms can help avoid contracting HIV/AIDS, is found to be part of the transmission mechanism between female education and female CUA but also to additionally exert its own, additional influence on CUA. I also discuss the implications of the analysis conducted here for the specification of spousal education variables and geographic fixed effects for future related research.
    Keywords: contraceptive use, female autonomy, spousal education differentials, gender norms, decomposition analysis, Bangladesh
    JEL: D13 I12 I21
    Date: 2018–07
  15. By: DIARRA, Setou; LEBIHAN, Laetitia; MAO TAKONGMO, Charles Olivier
    Abstract: In this paper, we use the Demographic and Health Survey conducted in Mali to compare children in polygynous families and their counterparts in monogamous families. We also analyse the link between the mothers' order of marriage and their children's outcomes. We finally propose a theoretical model to rationalise our findings. Our results show that children in polygynous families are less enrolled in school, progress less at school and do less domestic household work compared to children from monogamous families. For polygynous families, we found that educational enrolment and progress of children of the first wife are higher than that of children of the second and subsequent wives. Moreover, weight-for-height and body mass index are both lower for children of first wives compared to children of second and subsequent wives. Children of first wives work more at home compared to children of second and subsequent wives. Our theoretical model predicts that if fathers discriminate against their first wives and if effort at school is positively correlated to the father's discrimination, then, on average, children of first wives will perform better at school but will consume less and will have a lower health outcomes compared to children of second wives
    Keywords: Family structure, Polygyny, Education, Health, Child labour, Mali.
    JEL: I14 J13 O12 O15
    Date: 2018–08–17
  16. By: Veena S. Kulkarni, Vani S. Kulkarni and Raghav Gaiha
    Abstract: Abstract Obtaining detailed evidence on disabilities and their covariates is important as India’s elderly population (60 years or more) is growing three times faster than its population as a whole. This study is the first of its kind to provide an analysis of disability and its covariates among the elderly during 2005–12, based on the India Human Development Survey 2015, a nationally representative panel survey. Our econometric analysis throws light on why an increase in life expectancy among the aged has not translated into healthier lives. Based on an ordered probit specification, the reasons for this include the greater vulnerability of the older age group and elderly women, a largely rural population, low assets, non-communicable diseases (NCDs), lack of participation in social networks and a rise in the prevalence of single and multiple disabilities. Although the evidence is not detailed or conclusive, an expansion of morbidity among the aged cannot be ruled out. While The Rights of Persons with Disabilities Act 2016 is laudable in its intent and procedural detail, it is largely silent on disabilities among the elderly.
    Date: 2018
  17. By: Wei Zheng (School of Economics and Development, Wuhan University, China; School of Politics and International Relations, University College Dublin, Dublin, Ireland); Patrick Paul Walsh (School of Politics and International Relations, University College Dublin, Dublin, Ireland)
    Abstract: During the past 30 years, China has experienced high growth, and its economic expansion has been one of the strongest in world history. The rapid economic growth has accompanied by rapid increases in energy consumption, which has led to considerable air pollution and significantly affected mortality rate. In this study, Grossman Health Function was applied together with satellite-retrieved PM2.5 pollution data to estimate mortality rate caused by PM2.5 from 2001 to 2012. The results show some new evidence of the impact of sociological, economic and environmental factors on mortality rate of the population of China using the fixed effect (FE) and system generalized method of moments (GMM-sys) estimation methods. The PM2.5 has long-term positive significant effects on mortality. China is now experiencing a substantial mortality burden associated with current air pollution. Health care system and people’s education level are important in lowering mortality.
    Keywords: PM2.5, Mortality rate, Temperature
    Date: 2018–07–27
  18. By: Masters, William A.; Bai, Yan; Herforth, Anna; Sarpong, Daniel; Mishili, Fulgence; Kinabo, Joyce; Coates, Jennifer C.
    Abstract: Policies and programs often aim to improve the affordability of nutritious diets, but existing food price indexes are based on observed quantities which may not meet nutritional goals. To measure changes in the cost of reaching international standards of diet quality, we introduce a new Cost of Diet Diversity index based on consuming at least five different food groups as defined by the widely-used Minimum Dietary Diversity for Women (MDD-W) indicator, and compare those results with the cost of foods needed to meet an adult woman’s estimated average requirements of essential nutrients and dietary energy. Using national average monthly market price data for Ghana from 2009 through 2014, we find that the relative cost of reaching the MDD-W standard fluctuates seasonally and since mid-2010 has risen about 10 percent per year faster than inflation due to rising relative prices for fruit and fish, while the cost of nutrient adequacy rose even faster due primarily to increase cost of foods rich in vitamin A and calcium. Similar data for Tanzania from 2011 through 2015 show small increases in 2011 and 2012 but stable prices thereafter. Our methods can show where and when nutritious diets are increasingly (un)affordable, and which nutritional criteria account for the change. The specific foods included in each index depend on national price monitoring systems, but the method is generalizable to other contexts for monitoring, evaluation, and assessment of changing food environments.
    Keywords: Agricultural and Food Policy, Food Consumption/Nutrition/Food Safety, Food Security and Poverty
    Date: 2017–11–13
  19. By: Sulaimon, Mubaraq Dele; Muhammad, Adamu Auwal; Shofoyeke, Oluwafunmilayo
    Abstract: The desire to meet the basic needs of life in the face of poverty and increasing income inequality has propelled individuals in the country to look outward and beam their search light on alternative sources of income to either complement or substitute existing source. Prostitution, although demeaning and widely socially impugned, has been identified by some individuals as one of the feasible solutions to addressing the problem of financing basic human needs (BHNs) in the present Nigerian economic situation. Thus, the paper examines the possible health and growth implications of prostitution in Nigeria. The paper views the primary driver of prostitution through the conflict theory’s lens. As a result, the study identifies the unemployed, orphans, widows, divorcees, and members of low income households as the vulnerable groups in the economy. The paper concludes that the growth of poverty and income inequality will continue to drive prostitution among vulnerable groups, and the developmental efforts of the country will be undermined as a result of its possible associated health crisis and the sapping of human resources that otherwise could have been channeled to productive sectors of the economy. Thus, the paper suggests appropriate policy remedies that may assist in reducing the growth of prostitution among individuals and set the country on the path of growth and sustainable development.
    Keywords: Growth; Health; HIV/AIDS; Nigeria; Prostitution
    JEL: I15
    Date: 2018–08–06
  20. By: Woolcock, Michael (Harvard U)
    Abstract: In rich and poor countries alike, a core challenge is building the state's capability for policy implementation. Delivering high-quality public health and health care--affordably, reliably, at scale, for all--exemplifies this challenge, since doing so requires deftly integrating refined technical skills (surgery), broad logistics management (supply chains, facilities maintenance), adaptive problem solving (curative care) and resolving ideological differences (who pays? who provides?), even as the prevailing health problems themselves only become more diverse, complex and expensive as countries become more prosperous. The current state of state capability in developing countries, however, is demonstrably alarming, with the strains and demands only likely to intensify in the coming decades. Prevailing 'best practice' strategies for building implementation capability--copying and scaling putative successes from abroad--are too often part of the problem, while individual training ('capacity building') and technological upgrades (e.g., new management information systems) remain necessary but deeply insufficient. An alternative approach is outlined, one centered on building implementation capability by working iteratively to solve problems nominated and prioritized by local actors.
    Date: 2018–02
  21. By: Jofre-Bonet, Mireia; Kamara, Joseph
    Abstract: Purpose The objective of this project is to study the willingness to pay (WTP) for health insurance (HI) of individuals working in the informal sector in Sierra Leone, using a purposely-designed survey of a representative sample of this sector. Methods We elicit the WTP using the Double-Bounded Dichotomous Choice with Follow Up method. We also examine the factors that are positively and negatively associated with the likelihood of the respondents to answer affirmatively to joining a HI scheme and to paying three different possible premiums, to join the HI scheme. We additionally analyze the individual and household characteristics associated with the maximum amount the household is willing to pay to join the HI scheme. Results The results indicate that the average WTP for the HI is 20,237.16 SLL (3.6 USD) per adult but it ranges from about 14,000 SLL (2.5 USD) to about 35,000 SLL (6.2 USD) depending on region, occupation, household and respondent characteristics. The analysis of the maximum WTP indicates that living outside the Western region and working in farming instead of petty trade are associated with a decrease in the maximum premium respondents are WTP for the HI scheme. Instead, the maximum WTP is positively associated to being a driver or a biker; having secondary or tertiary education (as opposed to not having any); the number of pregnant women in the household; having a TV; and, having paid for the last medical requirement. Conclusions In summary, the various analyses show that a premium for the HI package could be set at approximately 20,000 SLL (3.54 USD) but also that establishing a single premium for all individuals in the informal sector could be risky. The efficient functioning of a HI scheme relies on covering as much of the population as possible, in order to spread risks and make the scheme viable. The impact of the various population characteristics raises the issue of how to rate premiums. In other words, setting a premium that may be too high for a big proportion of the population could mean losing many potential enrollees and might have viability consequences for the operation of the scheme.
    JEL: J1
    Date: 2018–05–16

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