Health Economics
14th Edition
ISBN: 9781137029966
Author: Jay Bhattacharya
Publisher: SPRINGER NATURE CUSTOMER SERVICE
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Chapter 4, Problem 11E
To determine
Determine whether the given statement is true or false.
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Indicate whether the statement is true or false, and justify your answer.There is a consensus among health economists that socioeconomic status has a major impact on health, but health does not have a significant effect on SES.
While it may seem intuitively obvious that health expenditures will increase as a population ages – older people after all are less healthy on average than younger people in fact, several prominent health economists have argued that it is not aging per se, but rather some of the correlates of an aging population that cause health expenditures to rise as a population ages. For instance, Getzen (1992) argues that, at least in part, rising health expenditures with an aging population are due to the higher incomes and resources of the older population; health care is a normal good, so higher incomes lead to higher expenditures. In a similar manner, Zweifel et al. (1999) argue that the real problem with an aging population, at least as far as health care costs are concerned, is that there will be more people who are within a couple of years of dying. Since health care expenditures rise sharply close to the end of life, it is this, rather than population aging by itself, that leads to higher…
There is a consensus among health economists that socioeconomic status (SES) has a
major impact on health, but health does not have a significant effect on SES.
True
False
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- While it may seem intuitively obvious that health expenditures will increase as a population age – older people, after all, are less healthy on average than younger people – in fact, several prominent health economists have argued that it is not ageing per se, but rather some of the correlates of an ageing population that cause health expenditures to rise as population ages. For instance, Getzen (1992) argues that, at least in part, rising health expenditures with an ageing population are due to the higher incomes and resources of the older population; health care is a normal good, so higher incomes lead to higher expenditures. In a similar manner, Zweifel et al. (1999) argue that the real problem with an ageing population, at least as far as health care costs are concerned, is that there will be more people who are within a couple of years of dying. Since health care expenditures rise sharply close to the end of life, it is this, rather than population ageing by itself, that leads to…arrow_forwardOne of the most robust, fundamental “facts” of health economics is the SES and health gradient. a) Define the SES and health gradient. b) Give three ways in which the SES and health gradient is robust. c) Provide evidence that some of the gradient is correlational (i.e., give a potential confounder) and evidence that the gradient is in fact causal. d) i. Give an interpretation of Figure 1 below in layperson terms. ii. What pattern do you see for men vs women? iii. “The education and mortality gradient does not depend on healthcare spending or whether the country has universal healthcare.” Use Figure 1 to support or refute this claim.arrow_forwardSuppose that in the fictional country ASU in 2012, a mandate was passed where everyone between the ages of 23-25 will receive health insurance at a discounted rate, while individuals aged 27-29 were not impacted by this policy. You, a researcher, want to study the effect of offering discounted health insurance coverage on the use of mental health services. You have data on the average number of visits for these two age groups over time. Using the information in the table below, a quick difference-in-difference calculation suggests that the mandate led to Time Periods Age group Avg. Avg. Number of Number of visits visits Pre-2012. Post-2012 23 to 25 2.3 27 to 29 2.5 approximately 0.3 more visits. approximately 0.7 more visits. approximately 0.4 fewer visits. approximately 0.7 fewer visits. approximately 0.3 fewer visits. 020202 337 SUCHARY 3.0 2.9 P 1302 126 70 5572 25 20120822 2012 Carrow_forward
- Indicate whether each statement is true or false, and justify your answer.One reason why total health expenditures are rising is because of an aging population.arrow_forwardThe following is the abstract from the paper, "The Impact of Health Insurance on Preventive Care and Health Behaviors: Evidence from the First Two Years of the ACA Medicaid Expansions," by Simon, Soni, Cawley (2017). The U.S. population receives suboptimal levels of preventive care and has a high prevalence of risky health behaviors. One goal of the Affordable Care Act (ACA) was to increase preventive care and improve health behaviors by expanding access to health insurance. This paper estimates how the ACA-facilitated state-level expansions of Medicaid in 2014 affected these outcomes. Using data from the Behavioral Risk Factor Surveillance System, and a difference-in-differences model that compares states that did and did not expand Medicaid, we examine the impact of the expansions on preventive care (e.g., dental visits, immunizations, mammograms, cancer screenings), risky health behaviors (e.g., smoking, heavy drinking, lack of exercise, obesity), and self-assessed health. We find…arrow_forwardIndicate whether the statement is true or false, and justify your answer. Unlike with most types of goods, deriving a demand curve for health care is quite simple because people rarely skimp on health care.arrow_forward
- Consider that you want to apply the difference-in-differences approach to evaluate the Health Insurance Subsidy Program (HISP). In this scenario, you have two rounds of data on two groups of households: one group that enrolled in the program, and another that did not. You know that you cannot compare the average health expenditures of the two groups because of selection bias, thus you decide to compare change in health expenditures as follows: Table 7.2 Evaluating HISP: Difference-in-Differences Comparison of Means After Before (baseline) (follow-up) Difference Enrolled 7.84 14.49 -6.65 Nonenrolled 22.30 20.79 1.51 Difference DD = -6.65 – 1.51 = -8.16 Note: The table presents mean household health expenditures (in dollars) for enrolled and nonenrolled households, before and after the introduction of HISP. How should you interpret this difference ($USD -8.16)? What are the basic assumptions required to accept this result from difference-in-differences?arrow_forwardIn the early 2000s, the state of Massachusetts in the U.S. implemented a health reform aimed at enrolling people without health insurance into an insurance plan. The reform required people without health insurance (at least those who could afford it) to buy insurance, and put in place penalties on those who nevertheless chose not to buy insurance. Below is the abstract of a recent National Bureau of Economic Research working paper entitled “Health Reform, Health Insurance, and Selection: Estimating Selection into Health Insurance Using the Massachusetts Health Reform” by Martin Hackmann, Jonathan Kolstad, and Amanda Kowalski. The authors conducted a study of the effects of the Massachusetts reform. They write: We implement an empirical test for selection into health insurance using changes in coverage induced by the introduction of mandated health insurance in Massachusetts. Our test examines changes in the cost of the newly insured relative to those who were insured prior to the…arrow_forwardIndicate whether each statement is true or false, and justify your answer.The goal of health policy is to maximize health, wealth, and equity.arrow_forward
- In the framework of the Grossman model, suppose there is an increase in the return in alternate non-health market investments. Draw what happens to the MEC curve and the optimal level of health. Explain intuitively why this might be the case in reality.arrow_forwardDescribe Grossman's Improvement Model of Health. How does Grossman reconcile health as both something in demand and something produced by individuals?arrow_forwardIndicate whether the statement is true or false, and justify your answer.People who drop out of high school are able to produce more health than college graduates because they have more free time to invest in health production.arrow_forward
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