nep-hea New Economics Papers
on Health Economics
Issue of 2018‒10‒22
sixteen papers chosen by
Nicolas R. Ziebarth
Cornell University

  1. Quality Regulation and Competition: Evidence from Pharmaceutical Markets By Atal, Juan Pablo; Cuesta, José Ignacio; Sæthre, Morten
  2. Inequality in socioemotional skills: a cross-cohort comparison By Orazio Attanasio; Richard Blundell; Gabriella Conti; Giacomo Mason
  3. Deductibles and Health Care Utilization: An Experiment on the Role of Forward-Looking Behavior By Kairies-Schwarz, Nadja; Harrison, Glenn W.; Han, Johann
  4. Food Anticipation Enhances Cognitive Ability of Overweight and Obese in the Presence of Hunger By Segovia, Michelle S.; Palma, Marco A.; Nayga Jr., Rodolfo M.
  5. Experimental and non-experimental evidence on limited attention and present bias at the gym By Muller, Paul; Habla, Wolfgang
  6. The Pass-Through of the Largest Tax on Sugar-Sweetened Beverages: The Case of Boulder, Colorado By John Cawley; Chelsea Crain; David Frisvold; David Jones
  7. Risk preference dynamics around life events By Kettlewell, Nathan
  8. Infant Health, Cognitive Performance and Earnings: Evidence from Inception of the Welfare State in Sweden By Karlsson, Martin; Schwarz, Nina; Bhalotra, Sonia; Nilsson, Therese
  9. The Effects of Education on Health: An Intergenerational Perspective By Huebener, Mathias
  10. Public Health Efforts and the Decline in Urban Mortality By D. Mark Anderson; Kerwin Kofi Charles; Daniel I. Rees
  11. Mental Health and Its Socioeconomic Inequality in Sweden: The Role of Demographic Changes over Time By Linder, Anna; Spika, Devon; Gerdtham, Ulf-G.; Fritzell, Sara; Heckley, Gawain
  12. The ACA Medicaid Expansion in Michigan and Financial Health By Sarah Miller; Luojia Hu; Robert Kaestner; Bhashkar Mazumder; Ashley Wong
  13. Health Shocks, the Added Worker Effect, and Labor Supply in Married Couples: Evidence from South Korea By Kyeongkuk Kim; Sang-Hyop Lee; Timothy J Halliday
  14. Retirement and healthcare utilization By Frimmel, Wolfgang; Pruckner, Gerald
  15. What Do Demographics Have To Do With It? An Oaxaca-Blinder Decomposition of Changes over Time in Inequalities in Alcohol, Narcotics and Tobacco-Related Ill Health in Sweden By Spika, Devon; Heckley, Gawain; Gerdtham, Ulf-G.
  16. Health and Economic Growth: Reconciling the Micro and Macro Evidence By Schünemann, Johannes; Bloom, David E.; Canning, David; Kotschy, Rainer; Prettner, Klaus

  1. By: Atal, Juan Pablo (University of Pennsylvania); Cuesta, José Ignacio (University of Chicago); Sæthre, Morten (Dept. of Economics, Norwegian School of Economics and Business Administration)
    Abstract: We study the effects of quality regulation on market outcomes by exploiting the staggered phase-in of bioequivalence requirements for generic drugs in Chile. We estimate that the number of drugs in the market decreased by 25%, average paid prices increased by 10%, and total sales decreased by 20%. These adverse effects were concentrated among small markets. Our results suggest that the intended effects of quality regulation on price competition through increased (perceived) quality of generics—and therefore reduced vertical differentiation—were overturned by adverse competitive effects arising from the costs of complying with the regulation.
    Keywords: Quality regulation; competition; bioequivalence; generic pharmaceuticals
    JEL: I11 L11 L15 L65
    Date: 2018–09–26
  2. By: Orazio Attanasio (University College London); Richard Blundell (University College London); Gabriella Conti (University College London); Giacomo Mason (University College London)
    Abstract: We examine changes in inequality in socio-emotional skills very early in life in two British cohorts born 30 years apart. We construct socio-emotional scales comparable across cohorts for both boys and girls, using two validated instruments for the measurement of child behaviour. We identify two dimensions of socio-emotional skills for each cohort: ‘internalising’ and ‘externalising’, related to the ability of children to focus their concentration and to engage in interpersonal activities, respectively. Using recent methodological advances in factor analysis, we establish comparability in the inequality of these early skills across cohorts, but not in their average level. We document for the first time that inequality in these early skills has increased across cohorts, especially for boys and at the bottom of the distribution. We also document changes in conditional skills gaps across cohorts. We find an increase in the socio- emotional skills gap in the younger cohort for children born to mothers with higher socio-economic status (education and employment), and to mothers who smoked during pregnancy. The increase in inequality in early socio-emotional skills is particularly pronounced for boys. On the other hand, we find a decline in the skills gradient for children without a father figure in the household. Lastly, we document that socio-emotional skills measured at a much earlier age than in most of the existing literature are significant predictors of outcomes both in adolescence and adulthood, in particular health and health behaviours. Our results show the importance of formally testing comparability of measurements to study skills differences across groups, and in general point to the role of inequalities in the early years for the accumulation of health and human capital across the life course.
    Keywords: Inequality, socio-emotional skills, cohort study, measurement invariance
    JEL: J13 J24 I14 I24
    Date: 2018–10
  3. By: Kairies-Schwarz, Nadja; Harrison, Glenn W.; Han, Johann
    Abstract: Recent evidence on nonlinear insurance contracts finds that individuals react to the embedded dynamic incentives by changing health care utilization. However, with field data it is difficult to keep the spot price among individuals constant while systematically varying the future price. To do so, we use a controlled laboratory experiment in which subjects are insured by a health plan with a deductible and go through a cycle of periods. In each period they face probabilistic health events and have to choose whether to seek treatment or not. We vary the likelihood of hitting the deductible by varying the number of periods and the height of the deductible, as well as controlling whether subjects receive regular information updates on their remaining deductible. We also elicit individual risk and time preferences. Our results show that varying the future price has a significant effect on spending behavior, regardless of whether the same future price is reached by changing the deductible or the number of periods. At an individual level, we identify perfectly forward-looking as well as perfectly myopic individuals. We find that a relationship between spending on health care and risk preferences, forward-looking behavior and giving information on the height of the deductible.
    Keywords: Health insurance,nonlinear prices,forward-looking behavior,laboratory experiment,risk and time preferences.
    JEL: I13 C91
    Date: 2018
  4. By: Segovia, Michelle S.; Palma, Marco A.; Nayga Jr., Rodolfo M.
    Abstract: By randomizing the order in which participants perform a cognitive test and a food choice task in a controlled experiment, we show that overweight and obese participants exhibit an anticipatory food reward effect. Eye tracking data revealed that temptation, in the form of visual attention, and emotional arousal was higher under low cognitive resources. The anticipation of food reward helped enhance the mental resources of overweight and obese individuals and improve their performance in a cognitive test. However, there was no anticipation reward among normal weight participants. Our results support the notion that rewarding processes underlying food intake present similar patterns to those behind other forms of addiction.
    Keywords: Food Consumption/Nutrition/Food Safety, Health Economics and Policy, Institutional and Behavioral Economics
    Date: 2018–01–10
  5. By: Muller, Paul; Habla, Wolfgang
    Abstract: We show that limited attention and present bias contribute to low levels of exercise. First, in a large randomized experiment, we find that email reminders increase gym visits by 13 % and that they benefit nearly all types of individuals. Limited attention can explain these effects. Second, using a novel dataset, we find that many bookings for gym classes are canceled, and that bookings are made even for classes that never have a waiting list. Comparing these findings to the predictions of a dynamic discrete choice model, we conclude that many gym members use bookings to commit themselves to future attendance.
    Keywords: health behavior,randomized experiment,reminders,nudging,habit formation,limited attention,time inconsistency
    JEL: C93 D91 I12
    Date: 2018
  6. By: John Cawley; Chelsea Crain; David Frisvold; David Jones
    Abstract: We estimate the incidence of a relatively new type of excise tax, a tax on sugar-sweetened beverages (SSBs). We examine the largest such tax to date, which is two cents per ounce, in Boulder, CO. Using data that were hand-collected from stores and restaurants in both Boulder and two control communities, as well as internet data of restaurant menus, we find that the tax was largely, but not completely, passed through to consumers 5-7 weeks after implementation. Some retailers add the tax only at the register, indicating that estimates solely from posted prices would result in an underestimate of pass-through.
    JEL: H22 H75 I18
    Date: 2018–09
  7. By: Kettlewell, Nathan
    Abstract: Using a panel of Australians I estimate the dynamic relationship between common life events and risk preferences. Changes in financial circumstances, parenthood and family loss predict changes in risk preferences. Importantly the effects are largest closer to the event date and disappear over time. This supports a model of preference information where risk preferences are (trend) stable but fluctuations are at least partly deterministic. The linkages between life events and risk preferences are explored. There is little evidence that changes in consumption, state dependence, or changes in mental health and mood explain the results. However, emotional stability is an influential moderator suggesting that emotions play an important role.
    Keywords: risk preferences; life events; dynamics; fixed effects ordered logit
    Date: 2018–07
  8. By: Karlsson, Martin; Schwarz, Nina; Bhalotra, Sonia; Nilsson, Therese
    Abstract: We estimate impacts of exposure to an infant health intervention trialled in Sweden in the early 1930s using purposively digitised birth registers linked to school catalogues, census files and tax records to generate longitudinal data that track individuals through four stages of the life-course, from birth to age 71. This allows us to measure impacts on childhood health and cognitive skills at ages 7 and 10, educational choice during young adulthood, employment, earnings and occupation at age 36{40, and pension income at age 71. Leveraging quasi-random variation in eligibility by birth date and birth parish, we estimate that an additional year of exposure was associated with substantial increases in earnings and (public sector) employment among women, alongside no improvements for men. Earnings gains for women were concentrated in the top quintile of the distribution. The earnings results appear to be related to the intervention having made it more likely that primary school test scores for girls were in the top quintile of the distribution and, related, that they attended secondary school. The greater investments of women in education are consistent with their comparative advantage in cognitive tasks, but opportunities are also likely to have played a role. Our sample cohorts were exposed to a massive expansion of the Swedish welfare state, which created unprecedented employment opportunities for women.
    Keywords: Infant health,early life interventions,cognitive skills,education,earnings,occupational choice,programme evaluation,Sweden
    JEL: I15 I18 H41
    Date: 2018
  9. By: Huebener, Mathias (DIW Berlin)
    Abstract: This paper presents evidence of substantial causal effects of parental education on children's health behaviours and long-term health. We study intergenerational effects of a compulsory schooling increase in Germany after World War II, which was implemented across federal states at different points in time. Maternal schooling reduces children's smoking and overweight in adolescence. The effects persist into children's adulthood, reducing chronic conditions that often result from unhealthy lifestyles. We find no effects of paternal education. Children's peer environment early in life and increased investments in their education are possible effect channels. The intergenerational effects exceed the direct effects on health.
    Keywords: parental education, returns to education, smoking, overweight, compulsory schooling, health behaviour
    JEL: I12 I24
    Date: 2018–08
  10. By: D. Mark Anderson; Kerwin Kofi Charles; Daniel I. Rees
    Abstract: Using data on 25 major American cities for the period 1900-1940, we explore the effects of municipal-level public health efforts that were viewed as critical in the fight against food- and water-borne diseases. In addition to studying interventions such as treating sewage and setting strict bacteriological standards for milk, which have received little attention in the literature, we provide new evidence on the effects of water filtration and chlorination, extending the work of previous scholars. Contrary to the consensus view, we find that none of the interventions under study contributed substantially to the observed declines in total and infant mortality.
    JEL: I18 J1 N3
    Date: 2018–09
  11. By: Linder, Anna (Health Economics Unit, Department of Clinical Science, Lund University); Spika, Devon (Department of Economics, Lund University); Gerdtham, Ulf-G. (Department of Economics, Lund University); Fritzell, Sara (Department of Public Health Science, Karolinska Institute, Sweden); Heckley, Gawain (Health Economics Unit, Department of Clinical Science, Lund University)
    Abstract: Abstract: Our aim is to study trends in mental ill-health and socioeconomic-related mental health inequalities over time in Sweden. We also make a first attempt at disentangling why we see such a development, by decomposing any changes in terms of changes in selected demographic and socioeconomic characteristics among the population. A secondary aim is to consider how different indicators for mental ill-health, as well as different measures of inequality, affect the conclusions we draw. Register data from the Swedish Interdisciplinary Panel and the Swedish Living Conditions Survey (administered by Statistics Sweden) are used to study trends in mental ill-health and mental health inequalities over the years 1994-2011. The study population comprises of working age individuals aged 31-64 living in Sweden. Four indicators of mental ill-health are used in the main analysis: self-reported anxiety, psychiatric inpatient diagnosis, psychiatric outpatient diagnosis and death by suicide. The results show that psychiatric diagnoses (in- and outpatient) increased substantially amongst 31 - 64 year olds between 1994 and 2011. Self-reported anxiety remained stable and suicides decreased. These results show that the different indicators of mental ill-health are not reflective of each other and how we measure mental ill-health largely affect the conclusions we draw. The mental ill-health indicators which suggest there is an increase in mental ill-health (in- and outpatient diagnosis) partly depend on attitudes, help-seeking behaviour and diagnostic practice. Thus, we cannot say that mental ill-health actually has increased. However, all mental ill-health indicators are becoming increasingly concentrated among women and among those not participating in the labour force, and psychiatric diagnoses are increasingly concentrated among those lowest educated. Income-related mental health inequalities in Sweden are substantial, and have increased significantly between 1994 and 2011, both regarding absolute and relative inequalities. More than 30 percent of self-reported anxiety and suicides, and half or all psychiatric in- and outpatient diagnoses, are found among the poorest fifth of the population. The decomposition results show that distributional changes in the population explain the increase in suicide inequality and partly explain the increase in psychiatric inpatient diagnosis inequality. However, overall, only small changes in the level of mental ill-health and mental health inequalities are explained by changes in the population characteristics we study.
    Keywords: Mental health; Inequality in health; Concentration index; Decomposition
    JEL: I10 I14
    Date: 2018–10–15
  12. By: Sarah Miller; Luojia Hu; Robert Kaestner; Bhashkar Mazumder; Ashley Wong
    Abstract: This article examines the impact of the Affordable Care Act Medicaid expansion in Michigan, the Healthy Michigan Program (HMP), on the financial well-being of new Medicaid enrollees. Our analysis uses a dataset on credit reports matched to administrative data on HMP enrollment and use of health care services. We find that enrollment is associated with large improvements in several measures of financial health, including reductions in unpaid bills, medical bills, over limit credit card spending, delinquencies, and public records (such as evictions, judgments, and bankruptcies). These benefits are apparent across several subgroups, although individuals with greater medical need (such as those with chronic illnesses) experience the largest improvements.
    JEL: I1 I13 I18
    Date: 2018–09
  13. By: Kyeongkuk Kim (University of Hawaii at Manoa Ministry of Strategy and Finance, Republic of Korea); Sang-Hyop Lee (University of Hawaii at Manoa); Timothy J Halliday (University of Hawaii at Manoa and IZA)
    Abstract: We investigate the effects of health shocks on labor supply among Korean married couples. Consistent with previous work, we find that own health shocks have substantial effects on own labor supply at the extensive margin. We also find evidence that spousal health shocks affect own labor supply, particularly, for wives. Specifically, we find that the onset of chronic illness for the husband reduces the probability of the wife exiting the labor force by 9.2 percentage points. This is the added worker effect (AWE). We find larger effects of spousal health shocks for chronic conditions than for acute conditions and accidents possibly because chronic conditions are associated with a smaller need for home care than acute conditions. Finally, we find stronger evidence of the AWE for households with co-residing adult children and for poorer household.
    Keywords: health, labor supply, couples
    JEL: I1 J14 J22 J26
    Date: 2018–10
  14. By: Frimmel, Wolfgang; Pruckner, Gerald
    Abstract: Pension systems and their reforms are often discussed in the context of financial viability. These debates grow in intensity with the aging of the population in industrialized countries. However, an increase in retirement age may create unintended side effects for retirees' health or healthcare costs. This paper empirically analyzes the effect of (early) retirement on individual inpatient and outpatient healthcare expenditure in Austria. We use comprehensive labor market and retirement data from the Austrian Social Security Database combined with detailed information about individual inpatient and outpatient healthcare service utilization for the province of Upper Austria. To account for the endogeneity in retirement decisions, we exploit exogenous variation in the early retirement age induced by two Austrian pension reforms in 2000 and 2003. We find significant negative effects of retirement on healthcare expenditure. For both sexes, retirement decreases subsequent expenditure for outpatient medical attendance and hospitalization. Analyses of disaggregated components of healthcare expenditure confirm a positive health effect caused by physical and emotional relief after retirement. Apart from direct health effects, the results also reveal behavioral changes in the utilization of healthcare services. These changes in health behavior seem in particular relevant for blue collar workers.
    Keywords: retirement,healthcare expenditure,health behavior,instrumental variable
    JEL: I11 I12 J26 H51
    Date: 2018
  15. By: Spika, Devon (Department of Economics, Lund University); Heckley, Gawain (Health Economics Unit, Department of Clinical Science, Lund University, Sweden); Gerdtham, Ulf-G. (Department of Economics, Lund University)
    Abstract: The purpose of this study was to document historical trends and socioeconomic inequalities in ill health outcomes related to alcohol consumption, narcotics use and tobacco smoking over the seventeen years prior to the implementation of the Swedish government’s first strategy for alcohol, narcotics, doping and tobacco (ANDT) in 2011. We also sought to explain the changes over time in terms of changes in the population distribution of selected demographic and socioeconomic characteristics. Our two key research questions, for each of alcohol, narcotics and smoking were: 1) How have trends in a) consumption, inpatient care and deaths, and b) income-related inequalities therein developed over time? 2) To what extent can demographic (gender, age, civil status, foreign background), socioeconomic (parental education, own education) and social characteristics (social isolation, proportion of welfare recipients in the municipality) explain the trends in a) levels of consumption, inpatient care and deaths, and b) income-related inequalities therein? For consumption, we investigated the prevalence of heavy drinking and smoking; data on narcotics use were not available. We used International Classification of Diseases (ICD) codes to identify inpatient care and deaths related to alcohol, narcotics and smoking. In our main analyses we used income as a measure of socioeconomic rank. We performed sensitivity analyses to investigate: i) the use of education as an alternative socioeconomic rank, ii) differences between measures of relative and absolute inequality, and iii) sex-differences in the trends over time. We document increasing pro-poor socioeconomic-related inequalities in all of our outcomes except heavy drinking (which was concentrated among higher income individuals, and did not change significantly) during the study period. This reflects an increasing concentration of smoking, and inpatient care and deaths related to alcohol, narcotics and smoking among low income individuals. We are able to explain some of the change over time by demographic and socioeconomic changes (i.e changes in the distribution of our sample by age, foreign background and educational attainment). However, our findings suggest that most of the change observed was due to external factors, such as changing norms and behaviours, and policy or macroeconomic conditions affecting certain groups more than others. In order to achieve the goal of equality in health, ANDT as a policy area must address the increasing concentration of alcohol-, narcotics- and smoking-related outcomes among the poorest and least educated in our society.
    Keywords: ANDT; Inequality in health; Alcohol; Narcotics; Tobacco; Concentration index
    JEL: I10 I12 I14
    Date: 2018–10–16
  16. By: Schünemann, Johannes; Bloom, David E.; Canning, David; Kotschy, Rainer; Prettner, Klaus
    Abstract: There are two prominent methods to assess the effects of health on economic growth. The first is based on the estimated returns on health by means of Mincer wage regressions that are aggregated to derive the macroeconomic effects of population health. The second approach is based on the estimation of a generalized aggregate production function that decomposes human capital into its different components, in particular, population health. While the overwhelming majority of studies based on both methods indicates a positive effect of health on economic growth, the size of the effect is still subject to intensive debate. We show that, after appropriately controlling for potential spillover effects of population health at the aggregate level, the point estimate of the macroeconomic effect of health is remarkably close to the one found by aggregating the microeconomic effects. Specifically, an increase in the adult survival rate of 10 percentage points is associated with a 9.1 percent increase in labor productivity. This effect is sizable and adds a strong argument for investments in population health over and above the direct welfare benefits of good health.
    Keywords: Productivity,Population Health,Micro-Macro Consistency,Human Capital,Economic Development
    JEL: I15 I25 J11 O11 O15
    Date: 2018

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