Lecture 4 - Risky Health Behaviours Flashcards
National Center for Health Statistics Data (2017)
Most prevalent NCDs over time
Most prevalent NCDs over time
1) Diseases of the heart
2) Malignant neoplasms
3) Cerebrovascular disease
IHME (2017)
Top 3 deaths by risk factor
Top 3 deaths by risk factor
1) high blood pressure
2) smoking
3) high blood sugar
What is high healthcare spending in the US attributable to?
Modifiable risk factors
- high BMI
- dietary risk
- smoking
- alcohol
- drugs
What is Grossman’s model of health capital?
Health is a stock that yields an output of healthy time
- people gain utility from health
- people receive an endowment of health capital at birth (depreciates with age and can be raised through investments)
- people invest in healthy by combining market goods/services and time
- ability to invest in health depends on skills, knowledge and education
- consumption and investment in health are constrained by time, income and prices (TIP)
- people invest in health behaviours until supply=demand
What is optimal participation?
Marginal costs (both of purchasing and non-monetary cost to health) equals marginal benefits (instantaneous pleasure from consumption)
What is marginal utility?
Change in utility
Utility is determined by current and past consumption. What are reinforcement, tolerance and withdrawal?
- reinforcement: the more you partake, the more you want to partake
- tolerance: the more you partake, the lower future utility
- withdrawal: positive marginal utility of current consumption
What is the theory of rational addiction?
Many irrational/unhealthy behaviours are consistent with individual utility maximisation.
Individuals understand their choices, but still make them because gains from activity (utility) exceed costs
People will engage in unhealthy behaviours when the discounted lifetime benefits (discounting future, more weight on present) exceed the respective costs
What does the utility of an addictive good depend on? (3)
1) current consumption of addictive good
2) stock of past consumption
3) current consumption of other goods
What are the key critiques of the theory of rational addiction?
1) Do individuals appropriately forecast future costs (and consumption) in advance? There are various empirical challenges and counter arguments.
2) Does future behaviour usually coincide with current desires regarding the behaviour? Time inconcistency, preference reversal and different selves suggest not.
3) Is the theory applicable to non-addictive goods? Auld and Grootendorst (2004)
Auld and Grootendorst (2004)
- Did a falsification test using time-series data for milk, oranges and egg consumption
- Based on their tests using the theory of rational addiction these goods were addictive
- Suggests that theory is flawed
What is time inconsistency & preference reversal, and different selves?
- time inconsistency and preference reversal: plan to do something in the future but change your mind (for the theory of rational addiction to hold true there can;t be any time inconsistency)
- different selves: at different points in time we make different choices
What is the equation for price elasticity of demand?
PED = ((Q1-Q0)/(Q1+Q0))/((P1-P0)/(P1+P0))
Q1 - quantity in current period
Q0 - quantity in previous period
P1 - price in current period
P0 - price in previous period
What does 0>PED>-1 and PED<-1 mean?
0>PED>-1 : inelastic, change in price has relatively small effect on quantity, necessities
PED<-1 : elastic, change in price has relatively large effect on quantity demanded
Gallet and List (2003)
Found that tobacco was a necessity for everyone but teens for which it was a luxury (PED = -1.43)
Do health behaviours influence other health outcomes?
- correlational studies provide limited information
- potential reverse causality between poor health outcomes and unhealthy behaviour
- can’t randomly assign people to treatment and control groups with unhealthy behaviours being the treatment, unethical
- solution: could exploit exogenous variation in unhealthy behaviours using a natural experiment with instrumental variable approaches
Do health behaviours influence healthcare use and cost?
- cost of illness studies fo not provide causal information
- quasi-experimental approaches by McGeary and French (2000) show that chronic drug use increases the probability of emergency room visits for 30% for females and 36% for males
- Cawley and Meyerhoefer (2012) found that obesity increased annual medical costs by over $2.5k
What are quasi-experimental approaches?
Used to estimate the causal impact of an intervention on a target population without random assignment
Do health behaviours influence educational performance?
- Renna (2007); binge drinking decreases the probability of graduating highschool by 5% for women and 15% for men
- There is mixed evidence on the link between obesity and educational outcomes
Do health behaviours influence labour market outcomes?
- Problem drinking negatively affects probability of employment (Terza, 2002)
- Alcohol dependency negatively affects probability of employment (Johansson et al, 2007)
- Marijuana and cocaine use negatively affects probability of employment (DeSimone, 2002)
- Chronic drug use negatively affects probability of employment (French et al, 2001)
- Mixed evidence on obesity and labour market outcomes
- Fictitious job applications were sent to real job postings, one with the original photo of the applicant and one manipulated to be obese. Applications with weight manipulated photo had a lower response rate for job interviews (6% for men, 8% for women) (Rooth, 2009)
Do health behaviours influence income and earnings?
- moderate alcohol consumption increases income by 10% but smoking decreases income by 25%
- generally there is an obesity income penalty for females; weight gain of 65lbs lowers wages 9-18% amoung white females (Cawley, 2004)
Do health behaviours influence crime?
- higher alcohol taxes and age regulation decreases crime rates (Carpenter and Dobkin, 2010)
- cocaine prevalence is linked to higher homicide rates (Fryer et al, 2005)
- underage alcohol consumption increases the probability of vandalising property, stealing and committing any illegal act (French and Maclean, 2006)
What is the case for government intervention in unhealthy behaviours, from public health and economic perspectives?
- Public health perspective: government should act to reduce unhealthy behaviours, regardless of the presence of market failures
- Economic perspective: government should fix market failures. Socially optimal levels of unhealthy behaviours are when marginal societal benefits equal marginal societal costs
What are the market failures of unhealthy behaviours?
- incomplete information about health consequences
- incomplete info about risks of addiction
- not considering externalities like risk imposed on to other people (e.g. second hand smoke)
Do taxes improve health behaviour?
- Raising taxes generally improves health behaviour, especially got cigarettes and alcohol (Cook and Moore, 2002)
- Summers (2018) argues we should tax “bads” instead of labour, income and production
- There are issues with tax regressivity since low-socio-economic status is more likely to engage in unhealthy behaviours
- Increasing taxes could lead to increased smuggling (Chaloupka and Warner, 2000)
- Task Force for Fiscal Policy for Health (2019) found that increasing taxes helped avert deaths related to tobacco and alcohol but sugary drinks to a lower extent
What are Pigovian taxes?
- Tax market activity with negative externalities to increase the total cost to offset the social cost.
- Results in socially optimal levels of unhealthy behaviours where marginal social benefits = marginal social costs
Do financial incentives improve health behaviour?
- Even small incentives to reward healthy behaviour may be effective (Cawley and Ruhm, 2011)
- Success of the intervention depends on the structure (Volpp et al, 2006)
- Vouchers raised compliance to reinforcement therapy by 30%, and the higher the value of the voucher the more immediate and larger the effect (Lussier et al, 2006)
- Mixed evidence on cash for weight loss (Cawley and Ruhm, 2011)
- Incentives help promote smoking cessation (Sigman and Patrick, 2012)
- Incentives are effective for infrequent behaviours (e.g. vaccinations) (Marteu et al, 2009)
Richard Thaler
- Said people don’t know why they do things because they have a reflective side (logical) but also an automatic side (driven by emotions, impulses, habits) which is fast
- If we make subtle changes to the environment or choice architecture we can influence behaviour without restricting choice. Take advantage of psychological and cognitive biases
- “If you want to get someone to do something, make it easy. Remove the obstacles” - Richard Thaler
Marteau et al (2011)
Nudges
Smoking
- Nudge: make non-smoking more visible through media campaigns (‘majority do not smoke and smokers want to quit), keep cigarettes, lighters and ashtrays out of sight
- Regulate: ban smoking in public places, increase price
Alcohol
- Nudge: serve drinks in smaller glasses, make lower alcohol consumption more visible
- Regulation: duty, raise minimum age of purchase
Diet
- Nudge: designate sections of supermarket trolleys for fruit/veg, make salad the default side option instead of chips
- Regulation: ban food ads in media for children, ban trans fatty acids
Physical activity
- Nudge: make stairs more prominent in public, make cycling visible as a means of transport
- Regulation: increase duty on petrol, car drop-off exclusion zones at schools
What does PED = -1.22 mean? PED = 1.22?
PED=-1.22 means a 1% fall in price increases demand by 1.22%
PED=1.22 means a 1% rise in price reduces demand by 1.22%
