Journal of Health Economics

Published by Elsevier BV

Print ISSN: 0167-6296


Toxic exposure in America: Estimating fetal and infant health outcomes from 14 years of TRI reporting
  • Article

July 2010


106 Reads



We examine the effect of exposure to a set of toxic pollutants that are tracked by the Toxic Release Inventory (TRI) from manufacturing facilities on county-level infant and fetal mortality rates in the United States between 1989 and 2002. Unlike previous studies, we control for toxic pollution from both mobile sources and non-TRI reporting facilities. We find significant adverse effects of toxic air pollution concentrations on infant mortality rates. Within toxic air pollutants we find that releases of carcinogens are particularly problematic for infant health outcomes. We estimate that the average county-level decreases in various categories of TRI concentrations saved in excess of 13,800 infant lives from 1989 to 2002. Using the low end of the range for the value of a statistical life that is typically used by the EPA of $1.8M, the savings in lives would be valued at approximately $25B.

Goddeeris JHTheoretical considerations on the cost of illness. J Health Econ 2:149-159

September 1983


20 Reads

This paper explores the measurement of the cost of illness from a theoretical perspective. It is shown that under a wide range of circumstances the aggregate willingness to pay ex ante to reduce the probability of an illness exceeds (1) the consumer surplus gained ex post from such a reduction, and also (2) the sum of medical expenditure saved and output gained. These results are of interest because they provide a stronger basis for presuming that conventional empirical studies estimate lower bounds on the true cost of illness, and because they hold even if medical insurance distorts expenditure decisions.

Does Price Reveal Poor-Quality Drugs? Evidence from 17 Countries

August 2011


162 Reads

Focusing on 8 drug types on the WHO-approved medicine list, we constructed an original dataset of 899 drug samples from 17 low- and median-income countries and tested them for visual appearance, disintegration, and analyzed their ingredients by chromatography and spectrometry. Fifteen percent of the samples fail at least one test and can be considered substandard. After controlling for local factors, we find that failing drugs are priced 13.6-18.7% lower than non-failing drugs but the signaling effect of price is far from complete, especially for non-innovator brands. The look of the pharmacy, as assessed by our covert shoppers, is weakly correlated with the results of quality tests. These findings suggest that consumers are likely to suspect low quality from market price, non-innovator brand and the look of the pharmacy, but none of these signals can perfectly identify substandard and counterfeit drugs.

Long-run effects on longevity of a nutritional shock early in life: The Dutch Potato famine of 1846-1847

September 2010


97 Reads

Nutritional conditions in utero and during infancy may causally affect health and mortality during childhood, adulthood, and at old ages. This paper investigates whether exposure to a nutritional shock in early life negatively affects survival at older ages, using individual data. Nutritional conditions are captured by exposure to the Potato famine in the Netherlands in 1846-1847, and by regional and temporal variation in market prices of potato and rye. The data cover the lifetimes of a random sample of Dutch individuals born between 1812 and 1902 and provide individual information on life events and demographic and socioeconomic characteristics. First we non-parametrically compare the total and residual lifetimes of individuals exposed and not exposed to the famine in utero and/or until age 1. Next, we estimate survival models in which we control for individual characteristics and additional (early life) determinants of mortality. We find strong evidence for long-run effects of exposure to the Potato famine. The results are stronger for boys than for girls. Boys and girls lose on average 4, respectively 2.5 years of life after age 50 after exposure at birth to the Potato famine. Lower social classes appear to be more affected by early life exposure to the Potato famine than higher social classes. These results confirm the mechanism linking early life (nutritional) conditions to old-age mortality. Finally, higher food prices at birth appear to reduce later life mortality of children of farmers from higher social classes. We interpret this as an income effect.

The Price Elasticity of Opium in Taiwan, 1914–1942

January 2000


99 Reads

Between 1895 and 1945, the Japanese colonial government virtually eliminated opium use in Taiwan by licensing and treating existing users, prohibiting sales to others, and raising the price. We evaluate these policies using a two-part model to describe the fraction of the population using opium and consumption among users, and the rational addiction model by Becker et al. (1991). We confirm that opium is addictive and find no evidence supporting the rational addiction hypothesis. Demand is price-elastic with estimated short- and long-run demand elasticities of -0.48 and -1.38. These results have implications for control of other addictive substances.

The impact of the 1918 Spanish flu epidemic on economic performance in Sweden

March 2014


2,417 Reads

We study the impact of the 1918 influenza pandemic on short- and medium-term economic performance in Sweden. The pandemic was one of the severest and deadliest pandemics in human history, but it has hitherto received only scant attention in the economic literature - despite representing an unparalleled labour supply shock. In this paper, we exploit seemingly exogenous variation in incidence rates between Swedish regions to estimate the impact of the pandemic. The pandemic led to a significant increase in poorhouse rates. There is also evidence that capital returns were negatively affected by the pandemic. However, contrary to predictions, we find no discernible effect on earnings.

The UK Demand for Cigarettes 1954–1986, A Double-hurdle Approach

April 1989


41 Reads

The double-hurdle perspective suggests that it is crucial to distinguish between per capita and per smoker consumption when estimating the demand for cigarettes. This paper presents a two equation model which identifies consumption and participation as two separate decisions. The model is estimated with annual data on U.K. cigarette expenditure and participation rates, highlighting the differing influence of prices, income and health scares on the participation rate and on smokers' demand for cigarettes.

The Long-Term Health and Economic Consequences of the 1959–61 Famine in China

August 2007


1,071 Reads

This paper, using a difference-in-differences method, tries to quantify the long-term effects of China's 1959-1961 famine on the health and economic status of the survivors. We find that the great famine caused serious health and economic consequences for the survivors, especially for those in early childhood during the famine. Our estimates show that on average, in the absence of the famine, individuals of the 1959 birth cohort would have otherwise grown 3.03 cm taller in adulthood. The famine also greatly impacted the labor supply and earnings of the survivors with famine exposure during their early childhood.

An analysis of invalidity benefit claim durations for new male claimants in 1977/1978 and 1982/1983

July 1990


7 Reads

This study analyses the duration of Invalidity Benefit (IVB) claims commencing in 1977/1978 and 1982/1983 using a hazard rate model. The analysis was carried out against a background of a substantial increase in the numbers claiming IVB. The main data base comprises a 1% random sample of all National Insurance records for the period 1975-1984, provided by the DHSS. Estimates are made of factors that influence claim durations. The results suggest that while age and health conditions are important, claim durations are also influenced by more narrowly defined economic considerations.

School meal crowd out in the 1980s

March 2013


27 Reads

This paper explores whether the state provision of school meals in the 1980s crowded out private provision by examining two policy reforms that radically altered the UK school meal service. Both reforms effectively increased the cost of school meals for one group (the treated), leaving another unaffected (the controls). I find strong evidence of crowd out: the reforms reduced school meal take-up among the treated by 20-30 percentage points, with no difference among the controls. I then examine whether this affected children's body weights, using a large, unique, longitudinal dataset of primary school children from 1972 to 1994. The findings show no evidence of any effects on child body weight.

The Impact of Tobacco Control Program Expenditures on Aggregate Cigarette Sales: 1981-1998

October 2003


96 Reads

Since the 1998 Master Settlement Agreement (MSA) between states and the tobacco industry, states have unprecedented resources for programs to reduce tobacco use. Decisions concerning the use of these funds will, in part, be based on the experiences of states with existing programs. We examine the experiences of several states that have adopted comprehensive tobacco control programs. We also report estimates from econometric analyses of the impact of tobacco control expenditures on aggregate tobacco use in all states and in selected states with comprehensive programs for the period from 1981 through 2000. Our analyses clearly show that increases in funding for state tobacco control programs reduce tobacco use.

Moral hazard and adverse selection in Australian private hospitals: 1989–1990

June 2003


244 Reads

The Australian hospital system is characterized by the co-existence of private hospitals, where individuals pay for services and public hospitals, where services are free to all but delivered after a waiting time. The decision to purchase insurance for private hospital treatment depends on the trade-off between the price of treatment, waiting time, and the insurance premium. Clearly, the potential for adverse selection and moral hazard exists. When the endogeneity of the insurance decision is accounted for, the extent of moral hazard can substantially increase the expected length of a hospital stay by a factor of up to 3.

The Virtuous Tax: Lifesaving and Crime-Prevention Effects of the 1991 Federal Alcohol-Tax Increase

November 2012


306 Reads

The last time that federal excise taxes on alcoholic beverages were increased was 1991. The changes were larger than the typical state-level changes that have been used to study price effects, but the consequences have not been assessed due to the lack of a control group. Here we develop and implement a novel method for utilizing interstate heterogeneity to estimate the aggregate effects of a federal tax increase on rates of injury fatality and crime. We provide evidence that the relative importance of alcohol in violence and injury rates is directly related to per capita consumption, and build on that finding to generate estimates. A conservative estimate is that the federal tax (which increased alcohol prices by 6% initially) reduced injury deaths by 4.5% (6480 deaths), in 1991, and had a still larger effect on violent crime.

The Medical Treatment of Depression, 1991-1996: Productive Inefficiency, Expected Outcome Variations, and Price Indexes

June 2002


169 Reads



Susan H Busch




We examine the price of treating episodes of acute phase major depression over the 1991-1996 time period. We combine data from a large retrospective medical claims data base (MarketScan, from the Medstat Group) with clinical literature and expert clinical opinion elicited from a two-stage Delphi procedure. This enables us to construct a variety of treatment price indexes that include variations over time in the proportion of the "off-frontier" production, as well as the corresponding variations in expected treatment outcomes. We find that in general the incremental cost of successfully treating an episode of acute phase major depression has generally fallen over the 1991-1996 time period. Based on hedonic regression equations that account for the effects of changing patient mix, we find reductions that range from about -1.66 to -2.13% per year.

Asymmetric peer effects in the analysis of cigarette smoking among young people in the United States, 1992–1999

April 2008


22 Reads

We extend the recent literature on peer effects to test the possible role of asymmetric social influences in the determination of youth smoking. We analyzed cigarette smoking among people aged 15-24 in approximately 90,000 households in the 1992-1999 U.S. Current Population Surveys. The presence of additional smoking sibling in a household, we estimated, raised a young person's probability of smoking by 7.6%, while each non-smoking sibling lowered the probability by an estimated 3.5%. Moreover, the overall deterrent effect of an increase in cigarette price on the probability of smoking was approximately 60% greater than the estimated effect when peer influences were held constant. The concept of asymmetric social influence may have applications in other fields, including labor economics, education, crime prevention, and group dynamics.

The Effect of the 1998 Master Settlement Agreement on Prenatal Smoking

April 2006


51 Reads

The Master Settlement Agreement (MSA) between the major tobacco companies and 46 states created an abrupt 20% increase in cigarette prices in November 1998. Earlier estimates of the elasticity of prenatal smoking implied that the price rise would reduce prenatal cigarette smoking by 7-20%. Using birth records on 9.8 million US births between January 1996 and February 2000, we examined the change in smoking during pregnancy and conditional smoking intensity in response to the MSA. Overall, adjusting for secular trends in smoking, prenatal smoking declined by less than half what was predicted in response to the MSA.

The reversal of the relation between economic growth and health progress: Sweden in the 19th and 20th centuries

June 2008


128 Reads

Health progress, as measured by the decline in mortality rates and the increase in life expectancy, is usually conceived as related to economic growth, especially in the long run. In this investigation it is shown that economic growth is positively associated with health progress in Sweden throughout the 19th century. However, the relation becomes weaker as time passes and is completely reversed in the second half of the 20th century, when economic growth negatively affects health progress. The effect of the economy on health occurs mostly at lag zero in the 19th century and is lagged up to two years in the 20th. No evidence is found for economic effects on mortality at greater lags. These findings are shown to be robustly consistent across a variety of statistical procedures, including linear regression, spectral analysis, cross-correlation, and lag regression models. Models using inflation and unemployment as economic indicators reveal similar results. Evidence for reverse effects of health progress on economic growth is weak, and unobservable in the second half of the 20th century.

Table 2 Estimated coefficients, goodness-of-fit, and statistical tests for the fixed effects models of the demand for 10 beverage categories. 
Estimation of Own and Cross Price Elasticities of Alcohol Demand in the UK–A Pseudo-Panel Approach Using the Living Costs and Food Survey 2001–2009
  • Article
  • Full-text available

January 2014


639 Reads

The estimation of price elasticities of alcohol demand is valuable for the appraisal of price-based policy interventions such as minimum unit pricing and taxation. This study applies a pseudo-panel approach to the cross-sectional Living Cost and Food Survey 2001/2-2009 to estimate the own- and cross-price elasticities of off- and on-trade beer, cider, wine, spirits and ready-to-drinks in the UK. A pseudo-panel with 72 subgroups defined by birth year, gender and socioeconomic status is constructed. Estimated own-price elasticities from the base case fixed effect models are all negative and mostly statically significant (p<0.05). Off-trade cider and beer are most elastic (-1.27 and -0.98) and off-trade spirits and on-trade ready-to-drinks are least elastic (-0.08 and -0.19). Estimated cross-price elasticities are smaller in magnitude with a mix of positive and negative signs. The results appear plausible and robust and could be used for appraising the estimated impact of price-based interventions in the UK.

Figure 1. 
Table 2
Heterogeneous Impact of the “Seguro Popular” Program on the Utilization of Obstetrical Services in Mexico, 2001-2006: A Multinomial Probit Model with a Discrete Endogenous Variable

September 2008


103 Reads

We evaluated the impact of Seguro Popular (SP), a program introduced in 2001 in Mexico primarily to finance health care for the poor. We focused on the effect of household enrollment in SP on pregnant women's access to obstetrical services, an important outcome measure of both maternal and infant health. We relied upon data from the cross-sectional 2006 National Health and Nutrition Survey (ENSANUT) in Mexico. We analyzed the responses of 3890 women who delivered babies during 2001-2006 and whose households lacked employer-based health care coverage. We formulated a multinomial probit model that distinguished between three mutually exclusive sites for delivering a baby: a health unit specifically accredited by SP; a non-SP-accredited clinic run by the Department of Health (Secretaría de Salud, or SSA); and private obstetrical care. Our model accounted for the endogeneity of the household's binary decision to enroll in the SP program. Women in households that participated in the SP program had a much stronger preference for having a baby in a SP-sponsored unit rather than paying out of pocket for a private delivery. At the same time, participation in SP was associated with a stronger preference for delivering in the private sector rather than at a state-run SSA clinic. On balance, the Seguro Popular program reduced pregnant women's attendance at an SSA clinic much more than it reduced the probability of delivering a baby in the private sector. The quantitative impact of the SP program varied with the woman's education and health, as well as the assets and location (rural vs. urban) of the household. The SP program had a robust, significantly positive impact on access to obstetrical services. Our finding that women enrolled in SP switched from non-SP state-run facilities, rather than from out-of-pocket private services, is important for public policy and requires further exploration.

An Analysis of the Length of Stay and Effectiveness of Treatment for Hip Fracture Patients in Japan: Evaluation of the 2002 Revision of the Medical Service Fee Schedule

August 2006


32 Reads

The length of hospital stay and effectiveness of medical treatment are analyzed using data of patients hospitalized due to hip fractures of four hospitals in Japan. The influence of the Revision of the Medical Service Fee Schedule in April, 2002, is evaluated, and factors which may have affected the length of stay and effectiveness of treatment (walking ability upon departure from the hospital) are also analyzed by a newly developed simultaneous equation model. (c) 2005 Elsevier B.V. All rights reserved.

Recession Depression: Mental Health Effects of the 2008 Stock Market Crash

September 2013


240 Reads

Do sudden, large wealth losses affect mental health? We use exogenous variation in the interview dates of the 2008 Health and Retirement Study to assess the impact of large wealth losses on mental health among older U.S. adults. We compare cross-wave changes in wealth and mental health for respondents interviewed before and after the October 2008 stock market crash. We find that the crash reduced wealth and increased feelings of depression and use of antidepressant drugs, and that these effects were largest among respondents with high levels of stock holdings prior to the crash. These results suggest that sudden wealth losses cause immediate declines in subjective measures of mental health. However, we find no evidence that wealth losses lead to increases in clinically-validated measures of depressive symptoms or indicators of depression.

Erratum to “Analysis of the distributional impact of out-of-pocket health payments: Evidence from a public health insurance program for the poor in Mexico” [J. Health Econ. 30 (2011) 707–718]

May 2011


92 Reads

Many governments have health programs focused on improving health among the poor and these have an impact on out-of-pocket health payments made by individuals. Therefore, one of the objectives of these programs is to reach the poorest and reduce their out-of-pocket expenditure. In this paper we propose the distributional poverty impact approach to measure the poverty impact of out-of-pocket health payments of different health financing policies. This approach is comparable to the impoverishment methodology proposed by Wagstaff and van Doorslaer (2003) that compares poverty indices before and after out-of-pocket health payments. In order to escape the specification of a particular poverty index, we use the marginal dominance approach that uses non-intersecting curves and can rank poverty reducing health financing policies. We present an empirical application of the out-of-pocket health payments for an innovative social financing policy implemented in Mexico named Seguro Popular. The paper finds evidence that Seguro Popular program has a better distributional poverty impact when families face illness when compared to other poverty reducing policies. The empirical dominance approach uses data from Mexico in 2006 and considers international poverty standards of $2 per person per day.

Hypertension and happiness across nations. J Health Econ 27: 218-233

April 2008


108 Reads

In surveys of well-being, countries such as Denmark and the Netherlands emerge as particularly happy while nations like Germany and Italy report lower levels of happiness. But are these kinds of findings credible? This paper provides some evidence that the answer is yes. Using data on 16 countries, it shows that happier nations report systematically lower levels of hypertension. As well as potentially validating the differences in measured happiness across nations, this suggests that blood-pressure readings might be valuable as part of a national well-being index. A new ranking of European nations' GHQ-N6 mental health scores is also given.

The Estimation of a Preference-Based Measure of Health from The SF-36

April 2002


279 Reads

This paper reports on the findings of a study to derive a preference-based measure of health from the SF-36 for use in economic evaluation. The SF-36 was revised into a six-dimensional health state classification called the SF-6D. A sample of 249 states defined by the SF-6D have been valued by a representative sample of 611 members of the UK general population, using standard gamble. Models are estimated for predicting health state valuations for all 18,000 states defined by the SF-6D. The econometric modelling had to cope with the hierarchical nature of the data and its skewed distribution. The recommended models have produced significant coefficients for levels of the SF-6D, which are robust across model specification. However, there are concerns with some inconsistent estimates and over prediction of the value of the poorest health states. These problems must be weighed against the rich descriptive ability of the SF-6D, and the potential application of these models to existing and future SF-36 data set.

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