nep-hea New Economics Papers
on Health Economics
Issue of 2018‒12‒10
twenty-one papers chosen by
Nicolas R. Ziebarth
Cornell University

  1. The Impact of Medicaid Expansion on Voter Participation: Evidence from the Oregon Health Insurance Experiment By Katherine Baicker; Amy Finkelstein
  2. The Economic Assimilation of Irish Famine Migrants to the United States By William J. Collins; Ariell Zimran
  3. Physicians’ incentives to adopt personalized medicine: experimental evidence By Bardey, David; Kembou Nzalé, Samuel; Ventelou, Bruno
  4. Risk-Adjusted Linearizations of Dynamic Equilibrium Models By Pierlauro Lopez; David Lopez-Salido; Francisco Vazquez-Grande o
  5. Information nudges and self-control By Mariotti, Thomas; Schweizer, Nikolaus; Szech, Nora; von Wangenheim, Jonas
  6. Quantifying the Benefits of Social Insurance: Unemployment Insurance and Health By Elira Kuka
  7. WIC Participation and Relative Quality of Household Food Purchases: Evidence from FoodAPS By Di Fang; Michael R. Thomsen; Rodolfo M. Nayga, Jr.; Aaron M. Novotny
  8. The Great Recession and Mental Health: the Effect of Income Loss on the Psychological Health of Young Mothers By Fiona M. Kiernan
  9. Occupational Retirement and Social Security Reform: the Roles of Physical and Cognitive Health By Jiayi Wen
  10. Opioid Use Disorder Treatment and Mortality: Evidence from Variation in Services Offered By Mark McInerney
  11. The Contribution of Patients and Providers to the Overuse of Prescription Drugs By Carolina Lopez; Anja Sautmann; Simone Schaner
  12. Attributing Medical Spending to Conditions: A Comparison of Methods By David Cutler; Kaushik Ghosh; Irina Bondarenko; Kassandra Messer; Trivellore Raghunathan; Susan Stewart; Allison B. Rosen
  13. Is Envy Harmful to a Society's Psychological Health and Wellbeing? A Longitudinal Study of 18,000 Adults By Mujcic, Redzo; Oswald, Andrew J.
  14. Adverse Selection in the German Health Insurance System – The Case of Civil Servants By Christian Bührer; Stefan Fetzer; Christian Hagist
  15. Crossover Designs for drug development By Mausumi Bose Bose
  16. Domestic Violence and Child Mortality By Rawlings, Samantha; Siddique, Zahra
  17. Fetal Exposure to Abnormal Rainfall Events and Later-Life Outcomes in Colombia By Carrillo, B.
  18. Comparing the productive effects of cash and food transfers in a crisis setting: Evidence from a randomized experiment in Yemen. By Schwab, B.
  19. Awareness and Demand for Sanitary Pads: Evidence from a Randomized Experiment in Communities of Nepal By Vinish Shrestha; Rashesh Shrestha
  20. Unblurring the Market for Vision Correction: A Willingness to Pay Experiment in Rural Burkina Faso By Grimm, Michael; Hartwig, Renate
  21. Civil War, Natural Disaster and Risk Preferences: Evidence from Sri Lankan Twins By Kettlewell, Nathan; Rijsdijk, Fruhling; Sumathipala, Athula; Tymula, Agnieszka; Zavos, Helena; Glozier, Nicholas

  1. By: Katherine Baicker; Amy Finkelstein
    Abstract: In 2008, a group of uninsured low-income adults in Oregon was selected by lottery for the chance to apply for Medicaid. Using this randomized design and state administrative data on voter behavior, we analyze how a Medicaid expansion affected voter turnout and registration. We find that Medicaid increased voter turnout in the November 2008 Presidential election by about 7 percent overall, with the effects concentrated in men (18 percent increase) and in residents of democratic counties (10 percent increase); there is suggestive evidence that the increase in voting reflected new voter registrations, rather than increased turnout among pre-existing registrants. There is no evidence of an increase in voter turnout in subsequent elections, up to and including the November 2010 midterm election.
    JEL: I13 I28
    Date: 2018–11
  2. By: William J. Collins; Ariell Zimran
    Abstract: The repeated failure of Ireland's potato crop in the late 1840s led to a major famine and a surge in migration to the US. We build a dataset of Irish immigrants and their sons by linking males from 1850 to 1880 US census records. For comparison, we also link German and British immigrants, their sons, and males from US native-headed households. We document a decline in the observable human capital of famine-era Irish migrants compared to pre-famine Irish migrants and to other groups in the 1850 census, as well as worse labor market outcomes. The disparity in labor market outcomes persists into the next generation when immigrants’ and natives’ sons are compared in 1880. Nonetheless, we find strong evidence of intergenerational convergence in that famine-era Irish sons experienced a much smaller gap in occupational status than their fathers. The disparities are even smaller when the Irish children are compared to those from observationally similar native white households. A descriptive analysis of mobility for the famine-era Irish sons indicates that more Catholic surnames and birth in Ireland were associated with less upward mobility. Our results contribute to literatures on immigrant assimilation, refugee migration, and the Age of Mass Migration.
    JEL: F22 J61 J62 N31 O15
    Date: 2018–11
  3. By: Bardey, David; Kembou Nzalé, Samuel; Ventelou, Bruno
    Abstract: We study physicians’ incentives to use personalized medicine techniques, replicating the physician’s trade-offs under the option of personalized medicine information. In a laboratory experiment where prospective physicians play a dual-agent real-effort game, we vary both the information structure (free access versus paid access to personalized medicine information) and the payment scheme (pay-for-performance (P4P), capitation (CAP) and fee-for-service (FFS)) by applying a within-subject design. Our results are threefold. i) Compared to FFS and CAP, the P4P payment scheme strongly impacts the decision to adopt personalized medicine. ii) Although expected to dominate the other schemes, P4P is not always efficient in transforming free access to personalized medicine into higher quality patient care. iii) When it has to be paid for, personalized medicine is positively associated with quality, suggesting that subjects tend to make better use of information that comes at a cost. We conclude that this last result can be considered a “commitment device”. However, quantification of our results suggests that the positive impact of the commitment device observed is not strong enough to justify generalizing paid access to personalized medicine.
    Keywords: Personalized medicine; fee-for-service; capitation; pay-for-performance; physician altruism and laboratory experiment
    JEL: C91 I11
    Date: 2018–11
  4. By: Pierlauro Lopez; David Lopez-Salido; Francisco Vazquez-Grande o
    Abstract: We propose a simple risk-adjusted linear approximation to solve a large class of dynamic models with time-varying and non-Gaussian risk. Our approach generalizes lognormal affine approximations commonly used in the macro-finance literature and can be seen as a first-order perturbation around the risky steady state. Therefore, we unify coexisting theories of risk-adjusted linearizations. We provide a formal foundation for approximation methods that remained so far heuristic, and offer explicit formulas for approximate equilibrium objects and conditions for their local existence and uniqueness. Affine approximations are not nested in conventional perturbations of arbitrary order. We apply this technique to models featuring Campbell-Cochrane habits, recursive preferences, and time-varying disaster risk. The proposed affine approximation performs similarly to global solution methods in many applications; risk pricing is accurate at all investment horizons, thereby capturing the main properties of investors’ marginal utility of wealth and measures of welfare costs of fluctuations.
    Keywords: Perturbation methods, Risky steady state, Macroeconomic uncertainty, Intertemporal risk prices, Risk-return tradeoff.
    JEL: C63 G12 E32 E44
    Date: 2018
  5. By: Mariotti, Thomas; Schweizer, Nikolaus; Szech, Nora; von Wangenheim, Jonas
    Abstract: We study the optimal design of information nudges for present-biased consumers who have to make sequential consumption decisions without exact prior knowledge of their long-term consequences. For arbitrary distributions of risk, there exists a consumer-optimal information nudge that is of cutoff type, recommending consumption or abstinence according to the magnitude of the risk. Under a stronger bias for the present, the target group receiving a credible signal to abstain must be tightened. We compare this nudge with those favored by a health authority or a lobbyist. When some consumers are more strongly present-biased than others, a traffic-light nudge is optimal.
    Keywords: information design,information nudges,present-biased preferences,selfcontrol
    JEL: C73 D82
    Date: 2018
  6. By: Elira Kuka (Southern Methodist University)
    Abstract: While the Unemployment Insurance (UI) program is one of the largest safety net programs 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, with stronger effects during periods of high unemployment rates. During such periods, higher UI generosity also leads to improved self-reported health. Finally, I find no effects on risky behaviors nor on health conditions.
    Keywords: Unemployment Insurance, health
    JEL: I1
    Date: 2018–10
  7. By: Di Fang; Michael R. Thomsen; Rodolfo M. Nayga, Jr.; Aaron M. Novotny
    Abstract: We examine the effect of the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) on the quality of household food purchases using the National Household Food Acquisition and Purchase Survey (FoodAPS) and propensity score matching. A healthy purchasing index (HPI) is used to measure nutritional quality of household food purchases. WIC foods explain the improvement in quality of food purchases, not self-selection of more nutrition-conscious households into the program. The improvement in purchase quality was driven entirely by WIC participating households who redeemed WIC foods during the interview week. There was no significant difference between WIC-participants who did not redeem WIC foods and eligible non-participants. In this sample, there is no evidence that lack of access to clinics has adverse effects on participation nor is there evidence that HPI depends on supermarket access. A supervised machine learning process supports our main conclusion on the importance of WIC foods.
    JEL: C21 D1 I1 I3 I38
    Date: 2018–11
  8. By: Fiona M. Kiernan
    Abstract: There is little consensus as to the effect of recessions on health, which may be due to the heterogenous nature of recessions, the choice of health outcome or the description of the independent variable involved. In contrast to previous work, which has predominantly studied labour market loss, I examine the relationship of income loss and health, and in particular focus on psychological rather than physical health. I study disposable income loss because disposable income is related to consumption expenditure, and therefore satisfaction. Psychological, rather than physical, health is important because younger populations are unlikely to manifest clinical evidence of recession-related disease in the short term. The Irish recession provides me with an opportunity to study the effect of changes in income, since households who remained in employment also experienced changes in disposable income. Using panel data from three waves of the Growing Up in Ireland study, I find that income loss is associated with an increase in depression, but not in parental stress. This effect of income loss is seen for those who are home owners, and subjective reports of being in mortgage or rent arrears is also associated with an increase in depression score.
    Keywords: Income; Psychological health; Recession; Fixed effects
    JEL: I15 I31 I39
    Date: 2018–10
  9. By: Jiayi Wen (Xiamen University)
    Abstract: Under skill-biased technical change, jobs are becoming less physically demanding whereas require increasing cognitive abilities. However, existing research does not pay sufficient attention on the role of cognitive health in older people's labor supply, nor to the occupation-dependent labor supply effects of physical and cognitive health. This paper reveals several facts about the heterogeneity of physical and cognitive health, as well as their relationship with older people's labor supply across occupations. Based on these facts, this paper proposes and estimates a dynamic programming structural model of individual retirement and saving decisions. The model allows labor supply effects of physical and cognitive health to differ across occupations via four channels respectively: disutility of working, wage, medical expenditure and life expectancy . I estimate the model with the U.S. Health and Retirement Study data by Indirect Inference. The counterfactual experiments suggest cognitive health has little retirement effect for manual workers. However, for clerical workers, the effect is almost as large as the one of physical health. The counterfactual experiment also reveals the mechanisms through which physical and cognitive health affects labor supply respectively. Finally, this paper quantifies the distributional effects of proposed Social Security changes on retirement, benefits and welfare across occupations.
    Keywords: Cognition, Retirement, Social Security
    Date: 2018–12–04
  10. By: Mark McInerney (University of Connecticut)
    Abstract: In this paper, I estimate the impact of substance abuse treatment facilities on the opioid related death rate and other outcomes that may be impacted by the opioid epidemic. Identifying variation comes from the opening and closing of treatment facilities at the county level. I exploit a new source of variation, variation across treatment facilities based on services offered and insurance type accepted. I find significant heterogeneity across treatment facilities. Treatment centers offering Medication Assisted Treatment and accepting Medicaid have a larger negative impact on the opioid related death rate than other treatment facilities.
    Keywords: substance use disorder, substance abuse treatment, Opioid epidemic
    JEL: I12 I13 I14 R1
    Date: 2018–11
  11. By: Carolina Lopez; Anja Sautmann; Simone Schaner
    Abstract: Overuse of medical care is often attributed to an informed expert problem, whereby doctors induce patients to purchase unnecessary treatments. Alternatively, patients may drive overuse of medications by exerting pressure on doctors to overprescribe, undermining the doctor's gatekeeping function for prescription medications. We develop a theoretical framework and designed a randomized trial to identify the importance of patients in driving overuse of antimalarials in community health clinics in Mali. Holding doctors' financial incentives constant, we vary patients' information about the availability of a discount for standard malaria treatment. We find evidence of patient-driven demand: directly informing patients about the price reduction, instead of allowing doctors to choose whether to share this information, increases use of the discount by 35 percent and overall rates of antimalarial use by 11 percent. This increase is driven by patients least likely to have malaria, leading to a worse match between treatment and cause of illness. We find no evidence that doctors use their information advantage to sell more powerful malaria treatment or increase revenue.
    JEL: I12 I18 O12
    Date: 2018–11
  12. By: David Cutler; Kaushik Ghosh; Irina Bondarenko; Kassandra Messer; Trivellore Raghunathan; Susan Stewart; Allison B. Rosen
    Abstract: Partitioning medical spending into conditions is essential to understanding the cost burden of medical care. Two broad strategies have been used to measure disease-specific spending. The first attributes each medical claim to the condition listed as its cause. The second decomposes total spending for a person over a year to the cumulative set of conditions they have. Traditionally, this has been done through regression analysis. This paper makes two contributions. First, we develop a new method to attribute spending to conditions using propensity score models. Second, we compare the claims attribution approach to the regression approach and our propensity score stratification method in a common set of beneficiaries age 65 and over drawn from the 2009 Medicare Current Beneficiary Survey. Our estimates show that the three methods have important differences in spending allocation and that the propensity score model likely offers the best theoretical and empirical combination.
    JEL: I1
    Date: 2018–11
  13. By: Mujcic, Redzo (University of Queensland); Oswald, Andrew J. (University of Warwick)
    Abstract: Nearly 100 years ago, the philosopher and mathematician Bertrand Russell warned of the social dangers of widespread envy. One view of modern society is that it is systematically developing a set of institutions - such as social media and new forms of advertising - that make people feel inadequate and envious of others. If so, how might that be influencing the psychological health of our citizens? This paper reports the first large-scale longitudinal research into envy and its possible repercussions. The paper studies 18,000 randomly selected individuals over the years 2005, 2009, and 2013. Using measures of SF-36 mental health and psychological well-being, four main conclusions emerge. First, the young are especially susceptible. Levels of envy fall as people grow older. This longitudinal finding is consistent with a cross-sectional pattern noted recently by Nicole E. Henniger and Christine R. Harris, and with the theory of socioemotional regulation suggested by scholars such as Laura L. Carstensen. Second, using fixed-effects equations and prospective analysis, the analysis reveals that envy today is a powerful predictor of worse SF-36 mental health and well-being in the future. A change from the lowest to the highest level of envy, for example, is associated with a worsening of SF-36 mental health by approximately half a standard deviation (p
    Keywords: envy, age, SF-36, mental health, well-being, life satisfaction, longitudinal data
    JEL: I18 I31
    Date: 2018–10
  14. By: Christian Bührer; Stefan Fetzer; Christian Hagist
    Abstract: At the beginning of their career civil servants in Germany can choose between the social health insurance (SHI) system and a private plan combined with a direct reimbursement of the government of up to 70 percent. Most civil servants chose the latter, not only but also because they have to cover all contribution payments in the social system themselves, while normal employees get nearly 50 percent from their employers. The city state of Hamburg decided to change the system by paying a share of the contributions if civil servants choose the social plan. We use a stochastic microsimulation model to analyse which socio-economic types of civil servants could benefit from the Hamburg plan and if this changes the mix of insured persons in the SHI system. Our results show that low income and high morbidity types as well as families have a substantially higher incentive to choose SHI. This reform might thereby increase the adverse selection of high risk cases towards SHI.
    Keywords: Health insurance, adverse selection, civil servants, microsimulation
    JEL: H55 I18 I13
    Date: 2018–12–02
  15. By: Mausumi Bose Bose (Indian Statistical Institute)
    Abstract: In clinical trials, an issue of paramount importance is that of determining the best treatment for an ailment, from among a class of competing treatments. Crossover designs have been widely used in clinical trials for drug development and recent years have seen a surge in research on these designs. In crossover trials, different drugs are applied to each patient over a sequence of time periods, observations being taken at each period. However, since the same patient is exposed to a sequence of drugs over time, the observation taken at any particular time period is influenced by the effect of the drug applied at that period, called the direct effect of a drug, together with an effect of the drug applied in the immediately preceding period, called the carryover effect of the drug. The presence of these two types of drug effects makes the design and analysis of these experiments difficult. Moreover, an observation is also influenced by an effect of the time period and effect of the patient. So, the key issues here include (a) adequate modelling of the observations, (b) estimation of direct and carryover effects, (b) derivation of efficient or optimal design for inference and (c) construction of this efficient design for experimental use.There are results available for efficient estimation for direct and carryover effects separately. However, a designed experiment finally recommends a single treatment for use over longer time periods, and when this treatment is used, an effect of utmost importance is the total of the direct effect and carryover effect of the same treatment, or the total drug effect. However, no results are available in the literature for this total effect. In this paper we focus on this issue and we develop a rigorous framework for studying the total effects under a non-circular model. Next, we derive the best design for use in this context. Some numerical results are also presented.
    Keywords: Clinical Trials, Total drug effect, Efficient estimation
    JEL: C90 I19 C00
    Date: 2018–10
  16. By: Rawlings, Samantha (University of Reading); Siddique, Zahra (University of Bristol)
    Abstract: We examine the effect of domestic violence on mortality of children born to female victims using Demographic and Health Survey (DHS) data across thirty two different developing countries. We start by examining associations between interpersonal violence and child mortality while controlling for potential confounds. We find that children of (ever) victimized mothers are 0.4 pp more likely to die within thirty days, 0.7 pp more likely to die within a year and 1.1 pp more likely to die within the first five years of being born in comparison with children born to mothers who never experienced violence. We find similar patterns when examining the effect of violence taking place in the last twelve months on female victims and their children. Our results are similar when we use matching methods. We also examine the causal effect of violence on child mortality using an instrumental variables strategy. Exploiting variation in domestic violence and marital rape laws across countries and over time, we find that laws that criminalize violence against women and/or marital rape lower its incidence. Using this as an exogenous source of variation in domestic violence, we find that children born within the last twelve months to female victims were 3.7 pp more likely to die in the first thirty days of life. Our results indicate significant externalities to violence against women and underline the importance of recent efforts to tackle this violence in developing countries.
    Keywords: child mortality, domestic violence
    JEL: I14 J12 J13
    Date: 2018–10
  17. By: Carrillo, B.
    Abstract: This paper provides estimates of the long-term impacts of prenatal exposure to rainfall shocks using Colombian data. I find that individuals prenatally exposed to rainfall shocks have fewer years of schooling, display increased rates of illiteracy, are less likely to work in the market, and are more likely to report serious mental and physical illness. This paper then uses historical information on malaria risk and fraction of population depending on farming to analyze the extent to which agricultural income and disease shocks may be the mechanisms driving the results. The patterns I find are generally consistent with these hypotheses Acknowledgement : I appreciate support and helpful comments from Danyelle Branco, Carlos Charris, Micheliana Costa, Wescley Freitas, Wilman Iglesias, Juan Trujillo, Raul Velilla, Ian Trotter, and participants at various seminars. I am grateful to the Tropical Agricultural Research and Higher Education Center (CATIE) and the International Development Research Centre (Ottawa, Canada) for substantial funding for this project.
    Keywords: Health Economics and Policy
    Date: 2018–07
  18. By: Schwab, B.
    Abstract: The productive impacts of transfer programs have received increased attention. However, little is known about such effects in emergency and crisis settings. Even less is known about whether transfer type a food basket or cash grant influences the productive potential of such transfers. Theory suggests that while cash transfers can relieve liquidity constraints associated with investments, subsidized food provision may prevent households from retreating to conservative income generating strategies by acting as a type of insurance during volatile periods. Using a randomized field experiment in Yemen, we contrast the effects of transfer modality. The results demonstrate a modest productive impact of both modalities, and suggest a role for both liquidity and price risk channels. Cash transfer recipients invested relatively more in activities with higher liquidity requirements (livestock), while food recipients incorporated higher return crops into their agricultural portfolio. Acknowledgement :
    Keywords: Food Security and Poverty
    Date: 2018–07
  19. By: Vinish Shrestha (Department of Economics, Towson University); Rashesh Shrestha (Research Institute for ASEAN and East Asia (ERIA))
    Abstract: Improving management of menstrual health by using modern but relatively costlier sanitary products can improve female’s health and schooling outcomes. However, menstruation is heavily stigmatized and managed using traditional practices in some developing nations. Price subsidies can potentially increase take-up, but its cost-effectiveness depends on the underlying demand elasticity. To understand whether awareness can increase demand in one such setting in Nepal, we conduct a field experiment in which treatment group was provided awareness regarding women’s health, including menstrual hygiene. In addition, both treatment and control groups received randomly allocated levels of discount on sanitary pad. Using information on redemption, we estimate the demand curves for treatment and control groups. Demand is downward sloping for both groups and there is a rightward-shift in the demand of treatment group. The effect of awareness treatment is largest at 50% discount level, with coupon redemption increasing by 23-26 percentage points due to awareness. We also estimate spillover effects of our awareness treatment, which turn out to be modest but yet economically relevant. The findings suggest that subsidies coupled with awareness program increases take-up of a relatively more advanced menstrual health technology and can promote cost-savings in a longer term.
    Keywords: Demand for health products, awareness, estimating elasticity, menstrual health.
    JEL: I15 D12 O33
    Date: 2018–11
  20. By: Grimm, Michael (University of Passau); Hartwig, Renate (University of Namur)
    Abstract: We assess the willingness to pay (WTP) for eyeglasses in an adult population in rural Burkina Faso using a variant of the Becker-DeGroot-Marschak (BDM) method. We combine the BDM approach with video and deferred payment options to analyze the role of information and liquidity constraints. Furthermore, we exploit variation in reservation and transaction prices to study potential screening and sunk cost effects. Our main results show that, consistent with the over-exclusion perspective documented for essential health products, the willingness to pay for glasses is low, amounting to 20% of the current market price. Information provided through a video raises the willingness to pay for corrective glasses by 16%. In contrast, deferred payment does not affect the willingness to pay. Finally, we find no evidence of screening or sunk cost effects. Overall our results lend support to subsidization of eyeglasses in a resource poor setting.
    Keywords: eyeglasses, information constraint, liquidity constraint, willingness to pay, Burkina Faso
    JEL: D11 D12 D83 I15
    Date: 2018–10
  21. By: Kettlewell, Nathan; Rijsdijk, Fruhling (King's College London); Sumathipala, Athula (Keele University); Tymula, Agnieszka (University of Sydney); Zavos, Helena (King's College London); Glozier, Nicholas (University of Sydney)
    Abstract: We estimate whether risk preferences are affected by traumatic events by using a unique survey of Sri Lankan twins which contains information on individual's exposure to the 2004 Indian Ocean Tsunami, participation as a combatant in the civil war, validated measures of mental health and risk preferences, and a rich set of control variables. Our estimation strategy utilises variation in experiences within twin pairs and allows us to explore whether preference changes are driven by wealth shocks and/or changes in mental health. We find that both events lead to less risk aversion, a result that is not driven by mental health or wealth changes.
    Keywords: risk preferences, natural disaster, civil war, twin study
    JEL: D74 D81 D91 Q54
    Date: 2018–10

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