|
on Health Economics |
| By: | Neil Christy; Amanda Ellen Kowalski |
| Abstract: | We present a design-based model of a randomized experiment in which the observed outcomes are informative about the joint distribution of potential outcomes within the experimental sample. We derive a likelihood function that maintains curvature with respect to the joint distribution of potential outcomes, even when holding the marginal distributions of potential outcomes constant -- curvature that is not maintained in a sampling-based likelihood that imposes a large sample assumption. Our proposed decision rule guesses the joint distribution of potential outcomes in the sample as the distribution that maximizes the likelihood. We show that this decision rule is Bayes optimal under a uniform prior. Our optimal decision rule differs from and significantly outperforms a ``monotonicity'' decision rule that assumes no defiers or no compliers. In sample sizes ranging from 2 to 40, we show that the Bayes expected utility of the optimal rule increases relative to the monotonicity rule as the sample size increases. In two experiments in health care, we show that the joint distribution of potential outcomes that maximizes the likelihood need not include compliers even when the average outcome in the intervention group exceeds the average outcome in the control group, and that the maximizer of the likelihood may include both compliers and defiers, even when the average intervention effect is large and statistically significant. |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2412.16352 |
| By: | Jonathan D. Ketcham; Nicolai V. Kuminoff; Nirman Saha |
| Abstract: | We develop a new revealed preference framework to estimate the value of statistical life (VSL). Our framework starts from a hedonic model of health care in which heterogenous individuals choose how much to spend on medical services that reduce mortality risk. Their choices generate an equilibrium survival function that can be differentiated to recover their marginal willingness to pay for mortality risk reduction. Our IV estimator uses survey data on Americans over age 66, linked to their federal administrative records. The mean VSL is approximately $1 million at age 67 and increasing in health, income, education, and life expectancy. |
| JEL: | Q51 |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33165 |
| By: | Valentin Flietner (PwC and Tinbergen Institute); Bernd Heidergott (Vrije Universiteit Amsterdam and Tinbergen Institute); Frank den Hollander (Leiden University); Ines Lindner (Vrije Universiteit Amsterdam and Tinbergen Institute); Azadeh Parvaneh (Leiden University); Holger Strulik (University of Göttingen) |
| Abstract: | In this paper, we advance the network theory of aging and mortality by developing a causal mathematical model for the mortality rate. First, we show that in large networks, where health deficits accumulate at nodes representing health indicators, the modeling of network evolution with Poisson processes is universal and can be derived from fundamental principles. Second, with the help of two simplifying approximations, which we refer to as mean-field assumption and homogeneity assumption, we provide an analytical derivation of Gompertz law under generic and biologically relevant conditions. We identify the parameters in Gompertz law as a function of the parameters driving the evolution of the network, and illustrate our computations with simulations and analytic approximations. |
| JEL: | I10 J10 |
| Date: | 2024–12–20 |
| URL: | https://d.repec.org/n?u=RePEc:tin:wpaper:20240079 |
| By: | Bogdan Savych; David Neumark |
| Abstract: | We estimate the causal effect of attorney involvement on the indemnity benefits workers receive after their injuries. To address the fundamental challenge that claims and injuries may differ on unmeasured dimensions that affect both attorney involvement and benefits received, we propose and use two instruments. The first is the baseline local area attorney involvement rate derived from a subset of claims for fractures, lacerations, and contusions without permanent partial disability and/or lump-sum payments. The second instrument is a delay in the first indemnity payment. Our outcome is the total indemnity benefits that workers receive after their injuries, which captures payments to workers for time lost from work and other adverse effects of an injury. Our analysis of more than 950, 000 claims with more than seven days of lost time indicates that attorney involvement substantially increases total indemnity benefits paid to workers. |
| JEL: | I18 J38 K31 |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33210 |
| By: | Edward Kong; Timothy Layton; Mark Shepard |
| Abstract: | Adverse selection is a classic market failure known to limit or “unravel”' trade in high-quality insurance and many other economic settings. While the standard theory emphasizes quality distortions, we argue that selection has another big-picture implication: it unravels competition among differentiated firms, leading to fewer surviving competitors—and in the extreme, what we call “un-natural” monopoly. Adverse selection pushes firms toward aggressive price cutting to attract price-sensitive, low-risk consumers. This creates a wedge between average and marginal costs that (like fixed costs in standard models) limits how may firms can profitably survive. We demonstrate this insight in a simple model of insurer entry and price competition, estimated using administrative data from Massachusetts' health insurance exchange. We find a large “selection wedge” of 20-30% of average costs, which (without corrective policies) unravels the market to monopoly. Our analysis suggests a surprising policy implication: interventions that limit price-cutting can improve welfare by supporting more entry, and ultimately lower prices. |
| JEL: | D4 I11 I13 L1 L40 |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33187 |
| By: | Marianne Bitler; Theodore F. Figinski |
| Abstract: | Previous work using mostly self-reports shows large, positive effects of early-life exposure to Food Stamps on self-sufficiency, health, and well-being-lasting well into adulthood. We combine this same adoption timing with administrative data on earnings, employment, and use of disability benefits. Women born in counties with Food Stamps available in early life had 3 percent higher earnings at age 32. Effects were larger in counties with another in-kind food program in place before Food Stamps. Food Stamps relied on the other program's preexisting administrative eligibility determination. Our results establish links between pre-existing administrative infrastructure and the later-life impacts of Food Stamps. |
| JEL: | H5 H53 I38 |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33182 |
| By: | Amy Finkelstein; Sarah Miller; Katherine Baicker |
| Abstract: | Those involved with the criminal justice system have disproportionately high rates of mental illness and substance use disorders, prompting speculation that health insurance, by improving treatment of these conditions, could reduce crime. Using the 2008 Oregon Health Insurance Experiment, which randomly made some low-income adults eligible to apply for Medicaid, we find no statistically significant impact of Medicaid coverage on criminal charges or convictions. These null effects persist for high-risk subgroups, such as those with prior criminal cases and convictions or mental health conditions. In the full sample, our confidence intervals can rule out most quasi-experimental estimates of Medicaid's crime-reducing impact. |
| JEL: | I10 I13 K42 |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33244 |
| By: | Jansen, Laura (University of Groningen); Angelini, Viola (University of Groningen); Groneck, Max; van Ooijen, Raun (De Nederlandsche Bank) |
| Abstract: | This paper studies the impact of stronger employer responsibilities for facilitating work resumption of sick or disabled workers on employers' workplace accommodation efforts during sick leave. We exploit a reform in the Netherlands that altered experience rating – i.e., shifting the costs of sick leave and disability insurance to the firm – both for permanent and non-permanent employees. Using unique Dutch survey data on workplace accommodation of long-term sick-listed workers, we show that experience rating has no significant impact on accommodation efforts. Moreover, we provide evidence that the reform led to more firms opting for self-arranging both the sick leave benefits and the reintegration process of sick non-permanent workers, instead of using the public insurance scheme. |
| Keywords: | workplace accommodation, disability insurance, experience rating, employer incentives |
| JEL: | H32 I13 J14 J24 |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17606 |
| By: | Gopi Shah Goda |
| Abstract: | The U.S. tax code partially subsidizes out-of-pocket medical spending as itemized medical deductions (IMDs). In this paper, using detailed information in the Health and Retirement Study, I find that while a substantial share of medical spending among older Americans is deducted through the tax code, take-up is incomplete: 61.8 (50.5) percent of potential tax savings (deductions) are claimed, resulting in lost tax savings of $5.4 billion annually. Further, frictions in take-up result in diverting tax savings from higher-need populations. I investigate potential mechanisms and estimate a discrete choice model to simulate eligibility, take-up and the implied cost of claiming under different policy counterfactuals. The results indicate that subsidizing medical expenses through the tax code imposes significant economic burdens, reducing the net subsidy available to taxpayers. |
| JEL: | H51 I13 J14 |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33213 |
| By: | E. Jason Baron; Joseph J. Doyle Jr.; Natalia Emanuel; Peter Hull |
| Abstract: | Black children in the U.S. are twice as likely as white children to spend time in foster care. Such racial disparities raise concerns of discrimination, but might also reflect differences in the underlying need for intervention. This paper estimates unwarranted disparities (UDs)—racial differences in placement rates for children with the same potential for future maltreatment—in national data. We use non-parametric bounds on the potential for future child maltreatment that rely on weak and transparent assumptions. Nationwide, we find that Black children are placed into foster care at higher rates than white children with identical potential to experience subsequent maltreatment; this UD is 42% larger than conventional estimates that control for observables. We demonstrate that UD varies across states and that both the proportion of Black individuals in the population and the racial makeup of caseworkers within a state are key factors in predicting the level of UD. Finally, we show that UD is five times larger among children with potential for subsequent maltreatment than among children without, and that it declined from 2008 to 2020, primarily due to a decline in the placement rate of Black children with potential for subsequent maltreatment. The concentration of UD in cases with potential for future maltreatment yields important policy implications, as it may indicate an "underplacement" of white children—with declining racial gaps over time potentially elevating the risk of maltreatment for Black children. |
| JEL: | I31 J13 J15 |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33154 |
| By: | Jakob (Max Planck Institute for Research on Collective Goods, Bonn) |
| Abstract: | This study examines the relationship between absenteeism and firm performance using data on 1, 387 stores of a retail chain, combined with public health data, covering a 36-month period. Crucially, the relationship between absenteeism and sales is not monotonic. Instead, it exhibits an inverted U-shape. This indicates that a reduction in absenteeism does not necessarily result in improved firm performance. In fact, moderate absenteeism is associated with higher sales than perfect attendance. Moreover, if the actual level of absenteeism is below the level expected due to the regional acute spread of respiratory disease, this is associated with lower sales than if both align. A similar relationship is also observed between absenteeism and measures of service quality. Endogeneity concerns are addressed using fixed effects regression and instrumental variable estimation. In conclusion, the results demonstrate that absenteeism is not generally detrimental to firm performance. It is therefore not advisable to attempt to avoid absenteeism altogether. |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:mpg:wpaper:2025_02 |
| By: | Janet Currie; N. Meltem Daysal; Mette Gørtz; Jonas Cuzulan Hirani |
| Abstract: | Mental health disorders are the leading cause of childhood disability worldwide. We examine the impact of a relatively common household stressor on child mental health: the presence of a younger sibling with a physical disability. Using Danish administrative data from families with at least 3 children, we focus on differences between first and second born children in families with and without a 3rd child with a disability. Second-born children in these families spend a larger fraction of their early childhood in families that may be under stress. We find that second-born children are 11 percent more likely to use mental health services than first-born children. There is a 19% increase in psychiatric visits and a 16% increase in use of psychiatric medications. These results are confirmed by matching models. |
| JEL: | I1 |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33303 |
| By: | Mette Gørtz; Ida L. Kristiansen; Tianyi Wang |
| Abstract: | While physicians are crucial to patient outcomes, what determines physician behavior and decision making remains to be understood. In this paper, we study how physicians’ family characteristics influence physicians’ behavior and patient health outcomes. Using administrative data from Denmark and the natural experiment of a child’s gender, we find that having daughters affects male primary care physicians’ practices and the health of their female patients. Specifically, female patients cared for by male physicians with one additional daughter (compared to one additional son) are 5.5% less likely to die from female-specific cancers, including breast and gynecologic cancers. This improvement in outcomes appears to stem from enhanced cancer screening and preventive efforts, leading to earlier detection and more successful prevention. Exploring potential mechanisms, we find that male physicians with more daughters show greater attentiveness to female-specific health guidelines and are more likely to collaborate with women. We also find suggestive evidence from survey data that female patients report higher levels of trust, empathy, and clearer communication with these physicians. |
| JEL: | I10 I14 J12 |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33146 |
| By: | Marius Opstrup Morthorst; David J. Price; Peter Rønø Thingholm |
| Abstract: | The opioid epidemic is often associated with economic hardship. We identify their causal relationship by estimating the effect of mass layoffs on opioid use and abuse in Denmark. This paper has three main contributions. First, we find the clearest evidence that economic conditions affect opioid use: individuals increase consumption by 65%, with evidence of abuse. Second, we disentangle indirect effects: spouses consume 40% more opioids. Third, we connect opioid demand (as we study) to the more prominent literature on supply, finding evidence that effects of layoffs are stronger in areas that have a large underlying supply of opioids. |
| Keywords: | layoffs, opioids, substance abuse |
| JEL: | J63 I14 I12 |
| Date: | 2025–01–22 |
| URL: | https://d.repec.org/n?u=RePEc:tor:tecipa:tecipa-794 |
| By: | Giovanni van Empel (Australian National University); Daniel Avdic (Deakin University); Umair Khalil (Deakin University); Johannes S. Kunz (Monash University); Bo Lagerqvist (UCR and SCAAR Study Group, Uppsala University); Johan Vikström (IFAU and Uppsala University) |
| Abstract: | We study spillovers in healthcare by exploring how cardiologists’ treatment choices are influenced by their peers. We employ clinical quality data from Sweden on the use of radiation in diagnostic angiography procedures. To account for endogeneity concerns, we instrument peers’ weekly radiation output using the plausibly exogenous arrival of emergency cases they handle. Our estimates suggest that focal cardiologists increase their radiation output by 0.7 standard deviations for each standard deviation increase in their peers’ output. These workplace spillovers lead to improved quality of care. Focal physicians detect additional blocked arteries, which increases treatment intensity and leads to lower risk-adjusted patient mortality. |
| Keywords: | peer effect, team management, physician practice style, healthcare quality |
| JEL: | D83 I11 I12 J24 M12 M54 |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:mhe:chemon:2025-01 |
| By: | Thomas Wilk; Monica Deza; Timothy Hodge; Shooshan Danagoulian |
| Abstract: | As recreational marijuana laws (RML) expanded marijuana access over the last decade, still very little is known about the impact of RML on two costly social behaviors that may arise as a consequence of marijuana consumption: unhealthy eating (i.e. munchies), and sedentary lifestyle (i.e. couch-lock). Using Nielsen IQ Consumer Panel data, we find that the passage of RML led to an increase in the number of grocery store trips that involved “junk food”, as well as the amount of respective “junk food” spending. This effect is particularly driven by an increase in snacks, cookies, and candy. Using the Behavioral Risk Factor Surveillance System (BRFSS) and the American Time Use Survey (ATUS), we find that the passage of RML led to a decrease in exercise, particularly driven by a reduction in cardio, and suggestive evidence of more time spent at home. The findings are robust to alternative methods that take into account the staggered implementation of RML. These results suggest that RMLs have an adverse effect on health through “munchies” and “couch-lock, ” which pose a significant public health challenge to diet and lifestyle-related chronic conditions. |
| JEL: | I1 I12 |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33176 |
| By: | Michael Haylock; Martin Karlsson; Maksym Obrizan |
| Abstract: | Economic growth in Sweden during the early 20th Century was largely driven by industry. A significant contributor to this growth was the installation of different kinds of engines used to power factories. We use newly digitized data on engines and their energy source by industry sector, and combine this with municipality-level data of workers per industry sector to construct a new variable reflecting economic output using dirty engines. In turn, we assess the average externality of dirty output on mortality in the short-run, as defined by deaths over the population in the baseline year. Our results show substantial increases of up to 17% higher mortality in cities where large increases to dirty engine installations occurred, which is largely driven by the elderly. We also run a placebo test using clean powered industry and find no effect on mortality. |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2412.01532 |
| By: | Lanfiuti Baldi, Giacomo; Nigri, Andrea; Trias-Llimos, Sergi; Barbi, Elisabetta |
| Abstract: | The term ”Deaths of Despair” (DoD) refers to mortality due to alcohol consumption, drug use, and suicides. While the concept has predominantly been studied in the United States, where these deaths have increased significantly, this analysis examines its application to Italy, a country with comparatively lower DoD rates. This work aims to analyse the magnitude of these causes of death in Italy and examine both their joint and independent trends to determine whether they can be treated as a single group of causes. We employ the Potential Gain in Life Expectancy to assess the impact of these causes on overall mortality in Italy, then investigate the identified time series leveraging Cointegration Analysis. Utilizing ISTAT data from 1983 to 2018, aggregated by gender and age groups at the NUTS1 level, the study reveals a decline in DoD mortality in Italy, driven mainly by a reduction in alcohol-related deaths. The magnitude and trajectory of the analysed causes offer valuable insights into the unique dynamics of DoD in Italy and its regional variations. Cointegration Analysis indicates that there is no significant dependency structure between these causes or across regions, with only a few exceptions. These findings suggest that in Italy, DoD should not be treated as a homogeneous group, but rather as distinct outcomes of despair that require separate consideration in public health interventions. |
| Date: | 2025–01–09 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:jnq2e |
| By: | Lorna Wheaton; Sylwia Bujkiewicz |
| Abstract: | Objectives: Surrogate endpoints, used to substitute for and predict final clinical outcomes, are increasingly being used to support submissions to health technology assessment agencies. The increase in use of surrogate endpoints has been accompanied by literature describing frameworks and statistical methods to ensure their robust validation. The aim of this review was to assess how surrogate endpoints have recently been used in oncology technology appraisals by the National Institute for Health and Care Excellence (NICE) in England and Wales. Methods: This paper identified technology appraisals in oncology published by NICE between February 2022 and May 2023. Data are extracted on methods for the use and validation of surrogate endpoints. Results: Of the 47 technology appraisals in oncology available for review, 18 (38 percent) utilised surrogate endpoints, with 37 separate surrogate endpoints being discussed. However, the evidence supporting the validity of the surrogate relationship varied significantly across putative surrogate relationships with 11 providing RCT evidence, 7 providing evidence from observational studies, 12 based on clinical opinion and 7 providing no evidence for the use of surrogate endpoints. Conclusions: This review supports the assertion that surrogate endpoints are frequently used in oncology technology appraisals in England and Wales. Despite increasing availability of statistical methods and guidance on appropriate validation of surrogate endpoints, this review highlights that use and validation of surrogate endpoints can vary between technology appraisals which can lead to uncertainty in decision-making. |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2412.02380 |
| By: | Ávila-Montealegre, Oscar; Bauhoff, Sebastian; Botero, Jesús; Giles Álvarez, Laura; León-Moncada, Santiago; Larrahondo, Cristhian; Lozano-Espitia, Luis Ignacio; Melo-Becerra, Ligia Alba; Ortiz-Hoyos, José Luis; Rodríguez-Ávila, Jesús |
| Abstract: | This study analyzes the macroeconomic and fiscal effects of greater efficiency in medicines procurement in Colombia, using both static (computable) and dynamic general equilibrium models. The findings indicate that implementing an efficient drug procurement policy could reduce the total health system spending, with potential savings of up to 8.4% in the short term and up to 10.8% in the long term. These savings could be reinvested within the health system, allocated to other sectors, or used to reduce tax burden on capital, consumption, or social contributions. The latter option would increase production by up to 1.1%, investment by 1.7% and consumption by 0.8%. Potential measures to achieve such efficiency gains include promoting and purchasing generic drugs, conducting joint procurement, and implementing price regulation. |
| Keywords: | Medications; Health expenditure; Health system; Colombia; Taxes; General equilibrium models; Pharmaceutical policy |
| JEL: | C68 D58 E26 H21 H51 I11 I18 |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:rie:riecdt:110 |
| By: | Lauren L. Bauer; Krista J. Ruffini; Diane Whitmore Schanzenbach |
| Abstract: | This paper examines how providing families with lump-sum in-kind assistance during the pandemic affected food hardship, economic well-being, and maternal health. We study the introduction of a new program, P-EBT, that provided grocery vouchers worth approximately $300 per student during spring and summer 2020. Using cross-state variation in program timing, we find that families spent $18-42 per student per week in the 6 weeks after benefit receipt. Household food insufficiency and children’s food insecurity among low-income families declined by 27-49% in the month following receipt, and maternal mental health improved by 0.9 standard deviation. |
| JEL: | H51 H53 I18 I38 |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33199 |
| By: | Pol Campos-Mercade (Department of Economics, Lund University); Armando N. Meier (Department of Economics, University of Basel); Stephan Meier (Columbia Business School, Columbia University); Devin Pope (Booth School of Business, University of Chicago); Florian H. Schneider (Department of Economics, University of Copenhagen); Erik Wengstroem (Department of Economics, Lund University) |
| Abstract: | Whether monetary incentives to change behavior work and how they should be structured are fundamental economic questions. We overcome typical data limitations in a large-scale field experiment on vaccination (N = 5; 324) with a unique combination of administrative and survey data. We find that guaranteed incentives of $20 increase uptake by 13 percentage points in the short run and 9 in the long run. Guaranteed incentives are more e ective than lottery-based, prosocial, or individually-targeted incentives, though all boost vaccinations. There are no unintended consequences on future vaccination or heterogeneities based on vaccination attitudes and incentivized economic preferences. Further, administrative data on relatives shows substantial positive spillovers. Our findings demonstrate the great potential of incentives for improving public health and provide guidance on their design. |
| Keywords: | incentives, health behavior, social preferences, prosociality, risk preferences, vaccination |
| JEL: | C93 D01 D62 I12 I18 |
| Date: | 2025–01–21 |
| URL: | https://d.repec.org/n?u=RePEc:kud:kucebi:2415 |
| By: | Luis Lopez; Dermot Murphy; Nitzan Tzur-Ilan; Sean Wilkoff |
| Abstract: | Wildfire smoke pollution is associated with significantly higher healthcare municipal borrowing costs, amounting to $250 million in realized interest costs for high-smoke counties in 2010–2019, and an estimated $570 million over the following 10 years. These costs are disproportionately higher in high-poverty or high-minority areas where there is more smoke-related uncompensated care. Out-of-state smoke is also associated with higher borrowing costs, suggesting poor wildfire management imposes externalities on nearby states. Our hospital-level analysis shows increases in asthma cases and unprofitable emergency room visits, tighter financial constraints and reduced investment. Migration sorting exacerbates these effects by concentrating vulnerable households in high-smoke counties. |
| Keywords: | municipal bonds; wildfires; smoke; air pollution; climate finance; externalities |
| JEL: | R31 O18 N32 |
| Date: | 2025–01–09 |
| URL: | https://d.repec.org/n?u=RePEc:fip:feddwp:99473 |