nep-ias New Economics Papers
on Insurance Economics
Issue of 2006‒09‒03
four papers chosen by
Soumitra K Mallick
Indian Institute of Social Welfare and Bussiness Management

  1. Sick Pay, Health and Work By Granberg, Malin; Löfgren, Karl-Gustaf
  2. The value of mortality risk reductions in Delhi, India By Bhattacharya, Soma; Alberini, Anna; Cropper, Maureen L.
  3. Variations Among Regions and Hospitals in Managing Chronic Illness: How Much Care Is Enough? Seventeenth Annual Herbert Lourie Memorial Lecture on Health Policy. By John E. Wennberg
  4. Measuring the cost of leaving care in Victoria By Catherine Forbes; Brett Inder; Sunitha Raman

  1. By: Granberg, Malin (Department of Economics, Umeå University); Löfgren, Karl-Gustaf (Department of Economics, Umeå University)
    Abstract: The purpose of this paper is to analyze the effects of different sickness insurance regimes on the employee decision reporting sick or not. We can think of the design problem as a representative employer’s decision to determine the optimal relationship between the wage and the sickness pay. The employee bases her decision to work or not on this relative price and her exogenously given health status that varies between individuals. We believe that the incentives present in the model are able to tell as about relevant aspects of the incentives involved in a state managed sickness insurance system. We calculate how the control variables depend on parameters such as the average productivity of the worker, the average productivity of the substitute, the wage of the substitute, and the search cost to find a substitute. Since we assume that the health status of the work force is heterogeneous and represented by a distribution function, we are also able to calculate the change in the work participation rate, as a function of the parameters.
    Keywords: Sickness insurance design; wage setting; and labour force participation
    JEL: I18 J20 J28
    Date: 2006–08–28
  2. By: Bhattacharya, Soma; Alberini, Anna; Cropper, Maureen L.
    Abstract: The authors interviewed commuters in Delhi, India, asking them to report their willingness to pay (WTP) to reduce their risk of dying in road traffic accidents in each of three scenarios that mirror the circumstances under which the majority of the road fatalities in Delhi occur. The WTP responses are internally valid, in the sense that WTP increases with the size of the risk reduction, income, and exposure to road traffic risks, as measured by length of commute and whether the respondent drives a two-wheeler. As a result, the " value of a statistical life " (VSL) is individuated-that is, it varies across groups of beneficiaries. For the most likely beneficiaries of road safety programs-the most highly exposed individuals-the VSL is about 150,000 PPP$.
    Keywords: Transport Economics Policy & Planning,Roads & Highways,Airports and Air Services,Road Safety,Insurance & Risk Mitigation
    Date: 2006–08–01
  3. By: John E. Wennberg (Center for the Evaluative Clinical Sciences, Dartmouth Medical School, HB 7251, Hanover, New Hampshire 03755)
    Abstract: Classic epidemiology looks at what happens to people who live in a defined region over time. For example, birth rate, the number of births that occur among populations over a year, is a common statistics that we're all familiar with. Since the early 1990s we have conducted research at Dartmouth Medical School to convert that classic epidemiologic perspective into looking at what is happening in terms of the health care system itself. We ask how much care people are getting in different regions of the country. We want to know the patterns of that care. And we want to get into the causes of so-called unwarranted variation, that is, differences that cannot be explained on the basis of patient illness, the dictates of scientific medicine, or the preferences of patients. Those three key words--illness, preference, and science--ultimately don't explain very much of the variation we see. We began the Dartmouth Atlas Project in 1993 as a study of health care markets in the United States, measuring variations in health care resources and their utilization among geographic areas. In recent years, we have expanded our research agenda to include the resources and utilization among patients at specific hospitals. We use very large claims databases from the Medicare program and other sources to define where people go for medical care, what kind of care they receive, and whether increasing investments in health care resources and their use result in better health outcomes.
    Keywords: nursing home, Medicare, Medicaid, long-term care, elderly, social welfare.
    JEL: I11 I23 I28 J14
    Date: 2006–07
  4. By: Catherine Forbes; Brett Inder; Sunitha Raman
    Abstract: On any given night in Victoria, around 4,000 children and young people live under the care and protection of the State. For many young people, this care extends over a long period of time, sometimes until their 18th birthday. It is well documented that young people leaving State care often lack the social and economic resources to assist them in making the transition into independent living. As a consequence, the long-term life outcomes from this group are frequently very poor. A recent report from The Centre for Excellence in Child and Family Welfare in partnership with Monash University estimated that, for a typical cohort of 450 young people who leave care in Victoria each year, the direct cost to the State resulting from these poor outcomes is $332.5 million. The estimated average outcomes of the leaving care population are based on a recent survey involving sixty young people who had spent at least two years in care as teenagers. This paper provides an overview of the economic methodology used to estimate this cost, and provides discussion of the motivation for measuring outcomes in terms of costs to the State.
    Keywords: cost-benefit, policy; state care, outcomes.
    JEL: D63 I38
    Date: 2006–08

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