nep-hea New Economics Papers
on Health Economics
Issue of 2019‒10‒14
twenty papers chosen by
Nicolas R. Ziebarth
Cornell University

  1. The Challenges of Universal Health Insurance in Developing Countries: Evidence from a Large-scale Randomized Experiment in Indonesia By Rema Hanna; Benjamin A. Olken
  2. Household Labor Search, Spousal Insurance, and Health Care Reform By Hanming Fang; Andrew J. Shephard
  3. How do Opioid Prescribing Restrictions Affect Pharmaceutical Promotion? Lessons from the Mandatory Access Prescription Drug Monitoring Programs By Thuy D. Nguyen; W. David Bradford; Kosali I. Simon
  4. Maternal and Fetal Health Effects of Working during Pregnancy By Dhaval M. Dave; Muzhe Yang
  5. Drug Diffusion Through Peer Networks: The Influence of Industry Payments By Leila Agha; Dan Zeltzer
  6. Market definition in the pharmaceutical industry: a case of drugs hopping antitrust markets? By Castanheira, Micael; Ornaghi, Carmine; Siotis, Georges
  7. The Effects of the Macroeconomy on the Labor Supply and Mortality in Long-term Care Institutions in Japan By HANAOKA Chie
  8. Entry decisions and asymmetric competition between non-profit and for-profit homes in the long-term care market By Grant, Iris; Kesternich, Iris; Van Biesebroeck, Johannes
  9. A Fresh Look at the Health-Wealth Correlation: A Case Study of European Countries By Shoshana Neuman; Teresa García-Muñoz; Tzahi Neuman
  10. Extreme Weather and Long-term Health: Evidence from Two Millennia of Chinese Elites By Wang-Sheng Lee; Ben G. Li
  11. Aging in the USA: Similarities and disparities across time and space By Abeliansky, Ana Lucia; Erel, Devin; Strulik, Holger
  12. A Latent Class Approach to Inequity in Health Using Biomarker Data By Davillas, Apostolos; Jones, Andrew M.
  13. Comparing latent inequality with ordinal data By David M. Kaplan; Longhao Zhuo
  14. The Tall and the Short of the Returns to Height By Michael Baker; Kirsten Cornelson
  15. Transition from plan to market, height and well-being By Adsera Ribera, Alicia; Dalla Pozza, Francesca; Guriev, Sergei; Kleine-Rueschkamp, Lukas; Nikolova, Elena
  16. The Effects of Job Characteristics on Retirement By Péter Hudomiet; Michael D. Hurd; Andrew Parker; Susann Rohwedder
  17. Gender differences in active ageing: Findings from a new individual-level index for European countries By David Steinmayr; Doris Weichselbaumer; Rudolf Winter-Ebmer
  18. Health and Development By Alberto Bucci; Lorenzo Carbonari; Monia Ranalli; Giovanni Trovato
  19. The effects of price and non-price policies on cigarette consumption in South Africa By Ernest Ngeh Tingum; Alfred Kechia Mukong; Noreen Mdege
  20. Multiple Dimensions of Human Development Index and Public Social Spending for Sustainable Development By Iana Paliova; Robert McNown; Grant Nülle

  1. By: Rema Hanna (Center for International Development at Harvard University); Benjamin A. Olken
    Abstract: To assess ways to achieve widespread health insurance coverage with financial solvency in developing countries, we designed a randomized experiment involving almost 6,000 households in Indonesia who are subject to a nationally mandated government health insurance program. We assessed several interventions that simple theory and prior evidence suggest could increase coverage and reduce adverse selection: substantial temporary price subsidies (which had to be activated within a limited time window and lasted for only a year), assisted registration, and information. Both temporary subsidies and assisted registration increased initial enrollment. Temporary subsidies attracted lower-cost enrollees, in part by eliminating the practice observed in the no subsidy group of strategically timing coverage for a few months during health emergencies. As a result, while subsidies were in effect, they increased coverage more than eightfold, at no higher unit cost; even after the subsidies ended, coverage remained twice as high, again at no higher unit cost. However, the most intensive (and effective) intervention – assisted registration and a full one-year subsidy – resulted in only a 30 percent initial enrollment rate, underscoring the challenges to achieving widespread coverage.
    Keywords: Global Health
    JEL: I13 O15
    Date: 2019–10
  2. By: Hanming Fang; Andrew J. Shephard
    Abstract: Health insurance in the United States for the working age population has traditionally been provided in the form of employer-sponsored health insurance (ESHI). If employers offered ESHI to their employees, they also typically extended coverage to their spouse and dependents. Provisions in the Affordable Care Act (ACA) significantly alter the incentive for firms to offer insurance to the spouses of employees. We evaluate the long-run impact of ACA on firms’ insurance offerings and on household outcomes by developing and estimating an equilibrium job search model in which multiple household members are searching for jobs. The distribution of job offers is determined endogenously, with compensation packages consisting of a wage and menu of insurance offerings (premiums and coverage) that workers select from. Using our estimated model we find that households’ valuation of employer-sponsored spousal health insurance is significantly reduced under ACA, and with an “employee-only” health insurance contract emerging among low productivity firms. We relate these outcomes to the specific provisions in the ACA.
    JEL: G22 I11 I13 J32
    Date: 2019–10
  3. By: Thuy D. Nguyen; W. David Bradford; Kosali I. Simon
    Abstract: Prior work considers effects of prescribing restrictions on opioid use but not upstream implications for pharmaceutical marketing activities, despite the inordinate role many believe marketing played in the crisis. Our study proposes a stylized model of pharmaceutical payments and investigates the impact of Mandatory Access Prescription Drug Monitoring Programs (MPDMPs) on opioid-specific commercial promotion directed at physicians. We find that MPDMPs reduce promotion on both extensive and intensive margins. Our results are consistent with economic theory, predicting lower promotional activities when return on investment decreases after state prescribing restrictions, and indicative of MPDMPs' role in affecting opioid use through reduced promotion.
    JEL: I11 I18
    Date: 2019–10
  4. By: Dhaval M. Dave; Muzhe Yang
    Abstract: We provide some of the first empirical evidence of maternal and fetal health effects of working during pregnancy by using a unique dataset from the New Jersey Department of Health that includes information not only on pregnancy and birth outcomes but also on maternal employment. We match the mother’s occupation with the Metabolic Equivalent of Task, provided by the Census Occupational Classification System and used as a measure for the strenuousness of the work activities performed. We find robust evidence that working in a relatively more strenuous job during pregnancy raises the likelihood of fetal macrosomia by about 1.5 percentage points. There are no statistically or economically significant effects on other birth outcomes. Our study further indicates an under-studied link between gestational diabetes (a known risk factor for fetal macrosomia) and intensive physical activities at work during pregnancy, potentially mediated by disrupted sleep due to greater work intensity.
    JEL: I12 J13
    Date: 2019–10
  5. By: Leila Agha; Dan Zeltzer
    Abstract: Pharmaceutical companies' marketing efforts primarily target physicians, often through individual detailing that entails monetary or in-kind transfers. We study how peer influence broadens these payments' reach beyond the directly paid physicians. Combining Medicare prescriptions and Open Payments data for anticoagulant drugs, we document that pharmaceutical payments target highly connected physicians. We exploit within-physician variation in payment exposure over time to estimate the payments' influence. Unlike the paid doctor, peer physicians are not directly selected by the pharmaceutical company on the basis of their expertise or enthusiasm for the target drug. Yet, following a large payment, prescriptions for the target drug increase both by the paid physician and the paid physician's peers. These peer effects influence doctors who share patients with the paid physician, even when the two doctors are not affiliated with the same group practice. We find no evidence that payments reduce prescriptions among high-risk patients. Over the period 2014--2016, physician payments associated with anticoagulant marketing increased the drugs' prescription volume by 23 percent, with peer spillovers contributing a quarter of the increase.
    JEL: I11 O33
    Date: 2019–10
  6. By: Castanheira, Micael; Ornaghi, Carmine; Siotis, Georges
    Abstract: Delineating the boundaries of the relevant market plays a central role in the conduct of competition policy. In this paper, we focus on market definition in the pharmaceutical industry, where the introduction of generics represents a significant competitive shock for the molecule experiencing Loss of Exclusivity. We show that generic entry generates market-wide effects that shift the boundaries of the relevant antitrust market, but in unexpected ways. In a market where non-price competition is prevalent, entry may lead to a split of the (initial) relevant market. Hence, and paradoxically, entry may soften competitive constraints. We also highlight the importance of properly accounting for non-price instruments: ignoring them can easily lead to a flawed definition of the relevant antitrust market. We obtain these results by econometrically estimating time-varying substitution patterns in the pharmaceutical industry.
    Keywords: Antitrust; competition policy; Market Definition; Pharmaceutical industry
    JEL: D22 I11 L22
    Date: 2019–10
  7. By: HANAOKA Chie
    Abstract: The numbers and types of workers in long-term care facilities may affect the quality of care in these facilities. Recent research has demonstrated that the supply of workers in nursing homes changes in response to macroeconomic conditions. Our study examines how staffing rates and mortality in long-term care institutions are affected by unemployment rates using data from public long-term care institutions in Japan. We find that the supply of skilled nursing care workers is sensitive to the macroeconomy and that mortality in long-term care institutions varies with these cyclic variations. These findings imply that cyclic fluctuations in mortality in long-term care institutions depend partially on cyclic fluctuations in the number of skilled nursing care workers.
    Date: 2019–09
  8. By: Grant, Iris; Kesternich, Iris; Van Biesebroeck, Johannes
    Abstract: The demand for long-term care (LTC) services is growing strongly, mostly due to population aging. Historically, the German LTC market was dominated by non-profit nursing homes, but the recent entry wave was tilted towards for-profit competitors. Using a rich administrative dataset on all LTC facilities in Germany, we examine strategic interaction between these two ownership types in a static entry model. The estimates of competitive effects imply that non-profit and for-profit homes are substitutes, but competition is much stronger within-type, suggesting that they provide differentiated products. For-profit homes in particular act as if they operate in a different market segment, but over time their entry behavior has converged to that of the more established non-profits. Counterfactual simulations of proposed changes in government policy suggest that even small changes favoring either type could have a large impact on the fraction of markets that remain unserved or only served by a single type.
    Keywords: Competition; For-profit; Long-term care; non-profit
    JEL: I11 L13 L22 L33
    Date: 2019–09
  9. By: Shoshana Neuman; Teresa García-Muñoz; Tzahi Neuman
    Abstract: This paper contributes to the development-health literature by studying the correlation between development measures (see below) and health measures - one subjective ('self-assessed-health-status'), and the other one objective (the individual's 'number of chronic diseases'). Correlations are examined for 29 European countries, using the SHARE data set, and country-level development measures. Specifically, we examine whether country fixed-effects in regressions of health measures, controlling for individual socio-demographic variables, are significantly correlated with country development variables, which include: logarithm of per-capita GDP; the Human Development Index; the Social Progress Index; life expectancy; percentage of GDP spent on health; and the novel measure expressed by the Environmental Health Index. The novelty of our study is the introduction of a channel for the significant health-wealth correlation, speculating that the driving forces are psychological.
    Keywords: development; self-assessed-health-status; diseases; environmental hazards; psychological motives; SHARE; Europe
    JEL: I1 I15
    Date: 2019–10–07
  10. By: Wang-Sheng Lee; Ben G. Li
    Abstract: Modern technology empowers human beings to cope with various extreme weather events. Using Chinese historical data, we examine the impact of extreme weather on long-term human health in an environment where individuals have no access to modern technology. By combining life course data on 5,000 Chinese elites with historical weather data over the period 1-1840 AD, we find a significant and robust negative impact of droughts in childhood on the longevity of elites. Quantitatively, encountering three years of droughts in childhood reduces an elite's life span by about two years. A remarkably important channel of the childhood drought effect is the deterioration of economic conditions caused by droughts.
    Keywords: Longevity, Weather, Early-life conditions, Elites, History of China
    JEL: I15 N35
    Date: 2019–09
  11. By: Abeliansky, Ana Lucia; Erel, Devin; Strulik, Holger
    Abstract: We study biological aging of elderly U.S. Americans born 1904-1966. We use thirteen waves of the Health and Retirement Study and construct a health deficit index as the number of health deficits present in a person measured relative to the number of potential deficits. We find that, on average, Americans develop 5 percent more health deficits per year, that men age slightly faster than women, and that, at any age above 50, Caucasians display significantly less health deficits than African Americans. We also document a steady time trend of health improvements. For each year of later birth, health deficits decline on average by about 1 percent. This health trend is about the same across regions and for men and women, but significantly lower for African Americans compared to Caucasians. In non-linear regressions, we find that regional differences in aging follow a particular regularity, akin to the compensation effect of mortality. Health deficits converge for men and women and across American regions and suggest a life span of the American population of about 97 years.
    Keywords: health,aging,health deficit index,United States
    JEL: I10 I19 J14 N32
    Date: 2019
  12. By: Davillas, Apostolos; Jones, Andrew M.
    Abstract: We develop an empirical approach to analyse, measure and decompose Inequality of Opportunity (IOp) in health, based on a latent class model. This addresses some of the limitations that affect earlier work in this literature concerning the definition of types, such as partial observability, the ad hoc selection of circumstances, the curse of dimensionality and unobserved type-specific heterogeneity that may lead to either upwardly or downwardly biased estimates of IOp. We apply the latent class approach to measure IOp in allostatic load, a composite measure of our biomarker data. Using data from Understanding Society (UKHLS), we find that a latent class model with three latent types best fits the data and that these types differ in terms of their observed circumstances. Decomposition analysis shows that about two-thirds of the total inequality in allostatic load can be attributed to the direct and indirect contribution of circumstances.
    Date: 2019–09–30
  13. By: David M. Kaplan (Department of Economics, University of Missouri); Longhao Zhuo (Department of Economics, University of Missouri)
    Abstract: Using health as an example, we consider comparing two latent distributions when only ordinal data are available. Distinct from the literature, we assume a continuous latent distribution but not a parametric model. Primarily, we contribute (partial) identification results: given two known ordinal distributions, what can be learned about the relationship between the two corresponding latent distributions? Secondarily, we discuss Bayesian and frequentist inference on the relevant ordinal relationships, which are combinations of moment inequalities. Simulations and empirical examples illustrate our contributions.
    Keywords: health; nonparametric inference; partial identification; partial ordering; shape restrictions
    JEL: C25 D30 I14
    Date: 2018–12–03
  14. By: Michael Baker; Kirsten Cornelson
    Abstract: We present new evidence of the correlation of height with important socioeconomic outcomes, finding the height profile is significantly non linear at mean height, especially for males. We trace this non linearity back to the adult height profiles of cognitive scores from the teenage and childhood years. Measures of birthweight and parental height have independent, mediating impacts on the adult height profiles of age 7 cognitive scores. However, the majority of the significant variation of male scores at heights below the average remains within birthweight/parental height cells.
    JEL: I3 J24
    Date: 2019–09
  15. By: Adsera Ribera, Alicia; Dalla Pozza, Francesca; Guriev, Sergei; Kleine-Rueschkamp, Lukas; Nikolova, Elena
    Abstract: Using newly available data, we re-evaluate the impact of transition from plan to market in former communist countries on objective and subjective well-being. We find clear evidence of the high social cost of early transition reforms: cohorts born around the start of transition are shorter than their older or younger peers. The difference in height suggests that the first years of reforms in post-communist countries were accompanied by major deprivation. We provide suggestive evidence on the importance of three mechanisms which partially explain these results: the decline of GDP per capita, the deterioration of healthcare systems, and food scarcity. On the bright side, we find that cohorts that experienced transition in their infancy are now better educated and more satisfied with their lives than their counterparts. Taken together, our results imply that the transition process has been a traumatic experience, but that its negative impact has largely been overcome.
    Keywords: height; Structural reforms; transition from plan to market; Well-being
    JEL: I14 I31 O12 P36
    Date: 2019–09
  16. By: Péter Hudomiet; Michael D. Hurd; Andrew Parker; Susann Rohwedder
    Abstract: This paper presents results based on a survey fielded in the RAND American Life Panel that queried older workers about their current, desired, and expected job characteristics, and about how certain job characteristics would affect their retirement. Having access to flexible work hours was found to be the most consistent predictor of retirement expectations. For example, we estimated that the fraction of individuals working after age 70 would be 32.2% if all workers had flexible hours, while the fraction working would be 17.2% if none had the option of flexible hours. We further found that job stress, physical and cognitive job demands, the option to telecommute, and commuting times were also strong predictors of retirement expectations. By comparing workers’ current job characteristics with those that individuals desire, we show that people would like preretirement jobs to be less cognitively and physically demanding and more sociable compared to their current jobs. We also find that most workers worry about their health and the demands of their jobs when they think about their future work trajectory, but relatively few were worried that their employers would retain them. Having access to part-time jobs, and expected longevity were less important predictors of retirement.
    JEL: J14 J24 J26
    Date: 2019–10
  17. By: David Steinmayr; Doris Weichselbaumer; Rudolf Winter-Ebmer
    Abstract: We use data from wave 6 of the Survey of Health, Ageing and Retirement in Europe (SHARE) to construct an individual-level index of active ageing for people aged between 50 and 90 years. We develop nine sub-indices for different dimensions, which are then aggregated to the final index. This individual-level index allows to analyze inequalities between age cohorts, dimensions, countries, and other individual-characteristics that are covered by SHARE. We focus on differences between the sexes. Overall, women score lower than men with 54.9 index-points compared to 57.7 for men. We present gender differences in active ageing for some sub-populations as a showcase for this new individual-level index.
    Date: 2019–01
  18. By: Alberto Bucci (Università di Milano, DEMM & FinGro Lab); Lorenzo Carbonari (CEIS & DEF, University of Rome "Tor Vergata"); Monia Ranalli (University of Rome "La Sapienza"); Giovanni Trovato (CEIS & DEF, University of Rome "Tor Vergata")
    Abstract: In this paper we examine whether the Solow growth model is consistent with across-countries variations in standard of living once investments in education and health are explicitly and simultaneously taken into account. Using a sample of low- and middle-income economies, we provide evidence that per capita GDP is positively affected by population's health, here proxied by the life expectancy at birth. Public expenditure on health affects indirectly the level of per capita income through its positive effectect on life expectancy. Using a Finite Mixture approach, we also show that richer economies are those where the impact of unobserved factors on the level of per capita income is stronger.
    Keywords: Health, Education and Human Capital, Economic Development and Growth, Finite Mixture Models, Classification
    JEL: I15 I25 J24 O41 C14
    Date: 2019–09–30
  19. By: Ernest Ngeh Tingum; Alfred Kechia Mukong; Noreen Mdege
    Abstract: The health consequences of smoking are serious and have been frequently detailed. A reduction in tobacco-related mortality hinges upon the ability to reduce tobacco usage. There is overwhelming evidence that higher cigarette prices reduce cigarettes demand, but little is known about the combined effect of price and non-price policies. This paper extends the analysis of price elasticities by estimating the effect of changes in price and non-price legislations in South Africa. Annual time-series data from 1961 to 2016 are used, with a policy index constructed to capture the instances of non-price tobacco legislation. The combined impact is estimated using a vector error correction model and a two-stage least squares (2SLS) model. The long-run own-price elasticities lie between -0.55 and -0.72, while the income elasticities lie between 0.39 and 0.49. The coefficients of the changing tobacco policies and changing market structure show that they contribute to a modest reduction in cigarette consumption. The short-run deviations from the steady state are presented using the error correction term. Cigarette demand is responsive to prices and non-pricing policies but failure to control for non-pricing policies overstates the price effect. This suggests that both prices and non-pricing legislation are effective in reducing cigarette consumption.
    Keywords: Price, non-price, tobacco policy, cigarette consumption, South Africa
    JEL: I18 D78
    Date: 2019–10
  20. By: Iana Paliova; Robert McNown; Grant Nülle
    Abstract: Multidimensional assessment of human development is increasingly recognized as playing an important role in assessing well-being. The focus of analysis is on the indicators measuring the three dimensions of Human Development Index (HDI) — standard of living, education and health, and their relationship with public social spending for achieving the 2030 Agenda for Sustainable Development. The study estimates the effects of public social spending on gross national income (GNI) per capita (in PPP in $), expected years of schooling and life expectancy for a sample of 68 countries. The relationship is robust to controlling for a variety of factors and the estimated magnitudes suggest a positive long-run effect of public educational spending on GNI per capita, public educational spending on expected years of schooling, and public health expenditures on life expectancy.
    Date: 2019–09–26

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