nep-hea New Economics Papers
on Health Economics
Issue of 2019‒07‒08
eighteen papers chosen by
Nicolas R. Ziebarth
Cornell University

  1. The Effect of SNAP on the Composition of Purchased Foods: Evidence and Implications By Justine S. Hastings; Ryan E. Kessler; Jesse M. Shapiro
  2. Do Report Cards Predict Future Quality? The Case of Skilled Nursing Facilities By Portia Y. Cornell; David C. Grabowski; Edward C. Norton; Momotazur Rahman
  3. More hospital choices, more C-sections: Evidence from Chile By Ramiro de Elejalde; Eugenio Giolito
  4. Cesarean sections: Use or abuse? By Annalisa Scognamiglio
  5. Discontinuity in Care: Practice Closures among Primary Care Providers and Patient Health By Marianne Simonsen; Lars Skipper; Niels Skipper; Peter Rønø Thingholm
  6. Modern body mass index values, marital status, and household size: 1980s to the present By Scott A. Carson
  7. Price Isn’t Everything: Behavioral Response around Changes in Sin Taxes By Alex Rees-Jones; Kyle T. Rozema
  8. Does Stimulating Physical Activity Affect School Performance? By Bart Golsteyn; Maria W. J. Jansen; Dave H. H. Van Kann; Annelore M. C. Verhagen
  9. The welfare implications of addictive substances: a longitudinal study of life satisfaction of drug users By Moschion, Julie; Powdthavee, Nattavudh
  10. Testing an Information Intervention: Experimental Evidence on the Effect of Jamie Oliver on Fizzy Drinks Demand By John Gibson; Steven Tucker; Geua Boe-Gibson
  11. Multiple Births, Birth Quality and Maternal Labor Supply: Analysis of IVF Reform in Sweden By Bhalotra, Sonia; Clarke, Damian; Mühlrad, Hanna; Palme, Mårten
  12. Pre- and Post-Birth Components of Intergenerational Persistence in Health and Longevity: Lessons from a Large Sample of Adoptees By Björkegren, Evelina; Lindahl, Mikael; Palme, Mårten; Simeonova, Emilia
  13. Fair long-term care insurance By Marie-Louise Leroux; Pierre Pestieau; Grégory Ponthiere
  14. The introduction of social pensions and elderly mortality: Evidence 1870-1939 By Jäger, Philipp
  15. The Evolution of Health over the Life Cycle By Hosseini, Roozbeh; Kopecky, Karen A.; Zhao, Kai
  16. Implications of Increasing College Attainment for Aging in General Equilibrium By Juan Carlos Conesa; Timothy J. Kehoe; Vegard M. Nygaard; Gajendran Raveendranathan
  17. Do measures of risk attitude in the laboratory predict behavior under risk in and outside of the laboratory? By Gary Charness; Thomas Garcia; Theo Offerman; Marie Villeval
  18. Why Do Americans Spend So Much More on Health Care than Europeans? (REVISED) By Hui He; Kevin X.D. Huang; Lei Ning

  1. By: Justine S. Hastings; Ryan E. Kessler; Jesse M. Shapiro
    Abstract: We use detailed data from a large retail panel to study the effect of participation in the Supplemental Nutrition Assistance Program (SNAP) on the composition and nutrient content of foods purchased for at-home consumption. We find that the effect of SNAP participation is small relative to the cross-sectional variation in most of the outcomes we consider. Estimates from a model relating the composition of a household’s food purchases to the household’s current level of food spending imply that closing the gap in food spending between high- and low-SES households would not close the gap in summary measures of food healthfulness.
    JEL: D12 H31 I12 I38
    Date: 2019–06
  2. By: Portia Y. Cornell; David C. Grabowski; Edward C. Norton; Momotazur Rahman
    Abstract: Report cards on provider performance are intended to improve consumer decision-making and address information gaps in the market for quality. However, inadequate risk adjustment of report-card measures often biases comparisons across providers. We test whether going to a skilled nursing facility (SNF) with a higher star rating affects outcomes for a patient. We exploit variation over time in the distance from a patient’s residential ZIP code to SNFs with different ratings to estimate the causal effect of admission to a higher-rated SNF on health care outcomes, including mortality. We found that patients who go to higher-rated SNFs experience lower mortality, fewer days in the nursing home, and fewer hospital readmissions.
    JEL: I11 I18
    Date: 2019–06
  3. By: Ramiro de Elejalde; Eugenio Giolito
    Abstract: In this paper, we study the effect on cesarean rates of a policy change in Chile that decreased the cost of delivery at private hospitals for women with public health insurance. Using a difference-indifferences (DID) approach based on the eligibility conditions for this benefit, we find that in the first three years after the policy took effect, deliveries in private hospitals increased by 8.7 percentage points, while the probability of a C-section being performed increased by 4.6 percentage points, with negative impacts on average newborn weight and size at birth. We show that the probability of an early term birth in hospitals participating in the program is an increasing function of expected hospital demand at the time of the full-term due date. This suggests that in the absence of price incentives, hospitals use C-sections to smooth out demand over time to optimize the use of their resources.
    Keywords: Health care, provider incentives, labor and delivery.
    JEL: I11 I13 I18
    Date: 2019–06–21
  4. By: Annalisa Scognamiglio (CSEF, Università di Napoli)
    Abstract: The cesarean rate in Italy is about 34%, higher than in other European countries and in the United States. It has been rising dramatically over the past decades and it varies considerably across geographical areas. I show that such geographical variation is not driven by medical need and that higher cesarean rates are achieved by performing the procedure on less and less appropriate patients. I find no evidence that high-use areas develop higher ability in performing cesareans. Finally, by using both panel data analysis and instrumental variables, I show that there is no significant relation between risk-adjusted cesarean rates and maternal and neonatal mortality. The combined evidence in this paper suggests that lowering cesarean rates would likely affect less appropriate patients, would not have negative spillovers in terms of quality of the procedure and would not affect neonatal nor maternal mortality. JEL Classification: I1, H42.
    Keywords: Cesarean section, neonatal and maternal health.
    Date: 2019–06–26
  5. By: Marianne Simonsen (Department of Economics and Business Economics, Aarhus University); Lars Skipper (Department of Economics and Business Economics, Aarhus University); Niels Skipper (Department of Economics and Business Economics, Aarhus University); Peter Rønø Thingholm (Department of Economics and Business Economics, Aarhus University)
    Abstract: This paper investigates consequences of practice closures among primary care providers on subsequent patient health care utilization and health. Critically, the analysis relies on population-level administrative Danish data that facilitate a unique link between all Danes and their family doctor. We start by characterizing the nature of a practice closure, including the change in provider characteristics that occurs when patients change provider. Practice closure leads patients to choose a systematically younger and less experienced primary care provider. Using a difference-in-differences strategy that compares individuals who experience a practice closing with similar individuals enrolled in similar practices that do not close until later, we next investigate consequences for patient health care utilization and health outcomes. We find that a change in provider due to practice closure increases detection of chronic illness but does not lead to concurrent changes in primary care utilization. We do detect a considerable increase in the use of emergency care, however. A decomposition exercise shows that both physician practice style and the disruption itself plays a role for the total effects but that the direction of their relative influence varies across outcome domains. Importantly, disruption is not always negative from the perspective of the patient.
    Keywords: Physician practice closure, disruption, practice styles
    JEL: I11 I12 I18
    Date: 2019–06–24
  6. By: Scott A. Carson
    Abstract: The body mass index (BMI) is the primary means of classifying obesity and reflects a complex set of interactions related to the institution of marriage and household characteristics. There is an inverse relationship between BMI and height, and height reflects the cumulative price of net nutrition during childhood and resources devoted to an off-spring’s health from care-givers. There are gender specific relationships between BMI and marital status, and after controlling for height, single women have lower BMIs than women in other household relationships. While causal mechanisms may have changed over time, there is a positive relationship between BMIs and household size.
    Keywords: family structure, obesity, marital status, net nutrition
    JEL: D13 I12 J12 J13
    Date: 2019
  7. By: Alex Rees-Jones; Kyle T. Rozema
    Abstract: Taxes change behavior. But how does this change arise? In traditional economic models, change is achieved through the price channel: assuming all else is held constant, taxes increase prices and thus decrease demand. However, the assumption that all else is held constant may be violated in the course of a legal change, in part because the process by which laws are changed often involves the provision of information, attempts at persuasion, and the deployment of alternative dissuasive tools. We examine violations of this assumption in a particular policy domain: discouraging smoking with cigarette taxes. We document a marked increase in related media coverage, lobbying efforts, place-based smoking restrictions, and anti-smoking appropriations in the time period surrounding a tax law change. The intensity of these factors is directly associated with decreases in cigarette consumption in a manner that could be confused with price effects. Our results suggest that price effects may have a surprisingly small role in the behavioral response that occurs around tax law changes.
    JEL: D9 H2
    Date: 2019–06
  8. By: Bart Golsteyn (Maastricht University); Maria W. J. Jansen (Maastricht University); Dave H. H. Van Kann (Maastricht University,); Annelore M. C. Verhagen (Maastricht University)
    Abstract: This paper investigates whether encouraging children to become more physically active in their everyday life affects their primary school performance. We use data from a field quasi- experiment called the Active Living Program, which aimed to increase active modes of transportation to school and active play among 8- to 12-year-olds living in low socioeconomic status (SES) areas in the Netherlands. Difference-in-differences estimations reveal that while the interventions increase time spent on physical activity during school hours, they negatively affect school performance, especially among the worst-performing students. Further analyses reveal that increased restlessness during instruction time is a potential mechanism for this negative effect. Our results suggest that the commonly found positive effects of exercising or participating in sports on educational outcomes may not be generalizable to physical activity in everyday life. Policymakers and educators who seek to increase physical activity in everyday life need to weigh the health and well-being benefits against the probability of increasing inequality in school performance.
    Keywords: health behavior, field quasi-experiment, education, physical activity
    JEL: I12 C93 I20
    Date: 2019–07
  9. By: Moschion, Julie; Powdthavee, Nattavudh
    Abstract: This paper provides an empirical test of the rational addiction model, used in economics to model individuals’ consumption of addictive substances, versus the utility misprediction model, used in psychology to explain the discrepancy between people’s decision and their subsequent experiences. By exploiting a unique data set of disadvantaged Australians, we provide longitudinal evidence that a drop in life satisfaction tends to precede the use of illegal/street drugs. We also find that the abuse of alcohol, the daily use of cannabis and the weekly use of illegal/street drugs in the past 6 months relate to lower current levels of life satisfaction. This provides empirical support for the utility misprediction model. Further, we find that the decrease in life satisfaction following the consumption of illegal/street drugs persists 6 months to a year after use. In contrast, the consumption of cigarettes is unrelated to life satisfaction in the close past or the near future. Our results, though only illustrative, suggest that measures of individual’s subjective wellbeing should be examined together with data on revealed preferences when testing models of rational decision-making
    Keywords: Life satisfaction Rational addiction Drugs Homeless Australia Happiness
    JEL: I12 I18 I30
    Date: 2018–02–01
  10. By: John Gibson (University of Waikato); Steven Tucker (University of Waikato); Geua Boe-Gibson (University of Waikato)
    Abstract: We conducted a salient purchasing experiment to test if an information intervention alters fizzy drinks demand. Subjects in our experiment initially made five rounds of purchases, for 14 items (energy drinks, colas, and lemonades) selected from a stratified sample of retailers. Subjects faced seven pricing environments, reflecting baseline prices, two ad valorem taxes, two specific taxes, and ad valorem and specific price cuts to reflect retailer discounting. Subjects then watched a video presentation by celebrity chef Jamie Oliver, which highlighted adverse health effects of sugary drinks. The five rounds of choices were then repeated, to generate within-subject before and after demands that show an overall 25 percent reduction in purchases due to the information intervention. Demand for one sugar-free option, Diet Coke, rose 36 percent after the intervention. The impacts under baseline prices were little different to those seen in conjunction with tax-induced price rises. Effects of the information intervention were larger for females, for the young, for the less educated, for those usually spending more on soft drinks, and for those who usually ignore sugar content when making purchases.
    Keywords: experiment; health; information; Jamie Oliver; soda taxes; sugar
    JEL: C91 D83 I18
    Date: 2019–06–30
  11. By: Bhalotra, Sonia (University of Essex); Clarke, Damian (Universidad de Santiago de Chile); Mühlrad, Hanna (Lund University); Palme, Mårten (Stockholm University)
    Abstract: In this study we examine the passage of a reform to in-vitro fertilization (IVF) procedures in Sweden in 2003. Following publication of medical evidence showing that pregnancy success rates could be maintained using single rather than multiple embryo transfers, the single embryo transfer (SET) was mandated as the default IVF procedure. Using linked registry data for the period 1998-2007, we find that the SET reform was associated with a precipitous drop in the share of multiple births of 63%. This narrowed differences in health between IVF and non-IVF births by 53%, and differences in the labor market outcomes of mothers three years after birth by 85%. For first time mothers, it also narrowed the gap in maternal health between IVF and non-IVF births by 36%. Our findings imply that more widespread adoption of SET could lead to massive gains, reducing hospitalization costs and the foregone income of mothers and improving the long-run socioeconomic outcomes of children. This is important given that the share of IVF facilitated births exceeds 3% in several industrialized countries and is on the rise.
    Keywords: IVF; Fertility; Maternal health; Neonatal health; Career penalty; Human capital formation
    JEL: I11 I12 I38 J13 J24
    Date: 2019–06–25
  12. By: Björkegren, Evelina (Department of Economics, Stockholm University); Lindahl, Mikael (Department of Economics, School of Business, Economics and Law, Göteborg University); Palme, Mårten (Department of Economics, Stockholm University); Simeonova, Emilia (Johns Hopkins University)
    Abstract: We use data on a large sample of Swedish-born adoptees and their biological and adopting parents to decompose the persistence in health inequality across generations into pre-birth and post-birth components. We use three sets of measures for health outcomes in the second generation: mortality, measures based on data on hospitalization and, finally, measures using birth outcomes for the third generation. The results show that all of the persistence in mortality is transmitted solely via pre-birth factors, while the results for the hospitalization measures suggest that at least three quarters of the intergenerational persistence in health is attributable to the biological parents.
    Keywords: Heath inequality; nature and nurture; intergenerational transmission
    JEL: I10 I14
    Date: 2019–06
  13. By: Marie-Louise Leroux; Pierre Pestieau; Grégory Ponthiere
    Abstract: The study of optimal long-term care (LTC) social insurance is generally carried out under the utilitarian social criterion, which penalizes individuals who have a lower capacity to convert resources into well-being, such as dependent elderly individuals or prematurely dead individuals. This paper revisits the design of optimal LTC insurance while adopting the ex post egalitarian social criterion, which gives priority to the worst-off in realized terms (i.e. once the state of nature has been revealed). Using a lifecycle model with risk about the duration of life and risk about old-age dependence, it is shown that the optimal LTC social insurance is quite sensitive to the postulated social criterion. The optimal second-best social insurance under the ex post egalitarian criterion involves, in comparison to utilitarianism, higher LTC benefits, lower pension benefits, a higher tax rate on savings, as well as a lower tax rate on labor earnings.
    Keywords: long-term care, social insurance, fairness, mortality, compensation, egalitarianism
    JEL: J14 I31 H55
    Date: 2019
  14. By: Jäger, Philipp
    Abstract: The strong association between income and mortality raises the question whether more generous social security systems could improve poor people's health outcomes. Thus, in this paper, I analyze whether a major social security innovation, the introduction of social pensions targeted at poor elderly people in the late 19th-early 20th century, has reduced mortality rates of senior citizens. Therefore, I use a cross-country dataset spanning from 1870 to 1939 consisting of 13 countries of which 9 eventually implemented social pensions before World War II. Applying a difference-in-difference-in-difference as well as a regression discontinuity design, I find no evidence for a decline in elderly mortality due to the introduction of social pensions. Based on aggregate census data, I argue that social pensions have reduced elderly labor supply. The reduction is much smaller than social pension recipiency rates, though. These findings suggest that social pensions have raised elderly incomes which, however, did not translate into lower mortality.
    Keywords: pension,social security,elderly mortality
    JEL: H55 I18
    Date: 2019
  15. By: Hosseini, Roozbeh (University of Georgia); Kopecky, Karen A. (Federal Reserve Bank of Atlanta); Zhao, Kai (University of Connecticut)
    Abstract: We construct a unified objective measure of health status: the frailty index, defined as the cumulative sum of all adverse health indicators observed for an individual. First, we show that the frailty index has several advantages over self-reported health status, particularly when studying health dynamics. Then we estimate a stochastic process for frailty dynamics over the life cycle. We find that the autocovariance structure of frailty in panel data strongly supports a process that allows the conditional variance of frailty shocks to increase with age. Our frailty measure and dynamic process can be used by researchers to study the evolution of health over the life cycle and its economic implications.
    Keywords: health; frailty index; life cycle profiles
    JEL: C33 I10 I14
    Date: 2019–06–01
  16. By: Juan Carlos Conesa; Timothy J. Kehoe; Vegard M. Nygaard; Gajendran Raveendranathan
    Abstract: We develop and calibrate an overlapping generations general equilibrium model of the U.S. economy with heterogeneous consumers who face idiosyncratic earnings and health risk to study the implications of exogenous trends in increasing college attainment, decreasing fertility, and increasing longevity between 2005 and 2100. While all three trends contribute to a higher old age dependency ratio, increasing college attainment has different macroeconomic implications because it increases labor productivity. Decreasing fertility and increasing longevity require the government to increase the average labor tax rate from 32.0 to 44.4 percent. Increasing college attainment lowers the required tax increase by 10.1 percentage points. The required tax increase is higher under general equilibrium than in a small open economy with a constant interest rate because the reduction in the interest rate lowers capital income tax revenues.
    Keywords: college attainment, aging, health care, taxation, general equilibrium
    JEL: H20 H51 H55 I13 J11
    Date: 2019–06
  17. By: Gary Charness (Department of Economics, University of California - UCSB - University of California [Santa Barbara]); Thomas Garcia (GATE Lyon Saint-Étienne - Groupe d'analyse et de théorie économique - ENS Lyon - École normale supérieure - Lyon - UL2 - Université Lumière - Lyon 2 - UCBL - Université Claude Bernard Lyon 1 - Université de Lyon - UJM - Université Jean Monnet [Saint-Étienne] - Université de Lyon - CNRS - Centre National de la Recherche Scientifique); Theo Offerman (CREED - Center for Research in Experimental Economics and Political Decision Making - UvA - Universiteit van Amsterdam); Marie Villeval (GATE Lyon Saint-Étienne - Groupe d'analyse et de théorie économique - ENS Lyon - École normale supérieure - Lyon - UL2 - Université Lumière - Lyon 2 - UCBL - Université Claude Bernard Lyon 1 - Université de Lyon - UJM - Université Jean Monnet [Saint-Étienne] - Université de Lyon - CNRS - Centre National de la Recherche Scientifique)
    Abstract: We consider the external validity of laboratory measures of risk attitude. Based on a large-scale experiment using a representative panel of the Dutch population, we test if these measures can explain two different types of behavior: (i) behavior in laboratory risky financial decisions, and (ii) behavior in naturally-occurring field behavior under risk (financial, health and employment decisions). We find that measures of risk attitude are related to behavior in laboratory financial decisions and the most complex measures are outperformed by simpler measures. However, measures of risk attitude are not related to risk-taking in the field, calling into question the methods currently used for the purpose of measuring actual risk preferences. We conclude that while the external validity of measures of risk attitude holds in closely related frameworks, this validity is compromised in more remote settings.
    Keywords: elicitation methods,Risk preferences,lab-in-the-field experiment
    Date: 2019
  18. By: Hui He (International Monetary Fund); Kevin X.D. Huang (Vanderbilt University); Lei Ning (Shanghai University of Finance and Economics)
    Abstract: Empirical evidence shows that both leisure and medical care are important for maintaining health. And taxation may affect the allocation of these two inputs. We build a life-cycle overlapping-generations model in which taxation and relative health care price are key determinants of the composition of the two inputs in the endogenous accumulation of health capital. In the model, a lower tax wedge leads to using relatively more medical care and less leisure in maintaining health, while a higher relative health care price implies an opposite substitution in quantity (away from medical care towards leisure) that weakens the direct bearing of the higher price on overall health spending. We show that differences in taxation and in relative health care price between the US and Europe can jointly account for a bulk of their differences in health expenditure- GDP ratio and in leisure time allocated for health production, with the taxation channel playing a quantitatively more significant role.
    Keywords: Macro-health, Taxation, Relative health care price, Health care expenditure, Time allocation, Life cycle, Overlapping generations
    JEL: E6 H2
    Date: 2019–04–09

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