Lectures 4,5 & 6 Flashcards
Consider the paper - Fernandez, Jose, Monica Garcia-Perez, and Sandra Orozco-Aleman “Unraveling the Hispanic health paradox”: What was the research question, main observations and what were the main findings?
- Hispanic immigrants have a lower level of education, income and health insurance coverage than other minority groups in the US and than whites but display better health outcomes than these groups of individuals in 2019.
LEADING EXPLANATIONS
- different demographic characteristics: age and gender, maternal age at birth
- “healthy immigrant effect”: (recent) immigrants tend to be relatively healthy as they are willing to pay the cost of immigration
- Salmon bias hypothesis: When hit by a negative health shock or when they retire, immigrants tend to return to their home country
- measurement error: possible that Hispanics are more likely to underreport health issues in survey data
- Cultural factors: Hispanics are less likely to smoke and consume alcohol
-low health insurance and health usage: makes diagnosis less likely in the group of Hispanics.
Consider the paper - Giuntella, Osea, and Jakub Lonsky
“The effects of DACA on health insurance, access to care, and health
outcomes”: What was the research question, main observations and what were the main findings?
- Paper studies the effects of the 2012 Deferred Action for Childhood Arrivals (DACA) initiative on health insurance, access to care, health care use, and health.
DACA provided certain immigrants who enter the US as minors a two-year renewable reprieve from deportation and work authorization. (some states granted access to Medicaid as well; otherwise access to private insurance form employer or from carrier)
The analysis combines variation:
- overtime: before and after the implementation of the reform
- across individuals: compared DACA-eligible with DACA-ineligible (basically an RDD as they select ineligible that are similar to eligible but marginally fail to meet some requirements)
IMPORTANT RESULTS
- the share with health insurance increased after 2012 in the group of DACA eligible immigrants (public if available otherwise private)
- Better access to care overall
- No significant effect on demand for healthcare overall
- Repealing DACA is expected to have the opposite effects
Consider the paper - Janet Currie
“Inequality at birth: Some causes and consequences”: What was the research question, main observations and what were the main findings?
RACIAL GAPS IN HEALTH OUTCOMES:
causes: - Exposure to environmental hazards
- Pandemic exposure
Solutions: - Environmental regulation
- Health practitioners diversity
this paper builds on existing literature on minority families being more exposed to environmental hazards
Minority families are disproportionately exposed to environmental hazards, partly because they are less likely to relocate and may have limited access to information about these risks. Lower housing prices in areas with environmental hazards can also make these neighborhoods more accessible to minority communities.
Paper tests these hypotheses by showing differences in pollution exposure between racial and education groups and whether whites are more likely to leave polluted areas than minorities
IMPORTANT RESULTS:
- Non-white mothers are in fact much more likely to live within 2,000 meters of a TRI or superfund site; education within race matters also but this tends to be smaller
- Argues that education helps individuals process information about hazard rates, especially if presented in a way that is hard to interpret.
Consider the paper - Currie, Janet, John Voorheis, and Reed Walker
“What caused racial disparities in particulate exposure to fall? New
evidence from the Clean Air Act and satellite-based measures of air
quality”: What was the research question, main observations and what were the main findings?
The Black-White gap in exposure to particulate matter declined substantially since 2000 but nothings seems to fully explain why this gap has declined.
the Clean Air Act was introduced in 1963 with substantial improvements in 1970 with compliance overseen by EPA
- Focus on mandated reduction in annual PM2.5 implemented in 2005
IMPORTANT RESULTS:
- Black are more likely to benefit from the 2005 reform.
- Whites tend to move to areas that experienced the largest improvements offsetting some of the relative gains.
Consider the paper - Alsan, Marcella, Amitabh Chandra, and Kosali Simon. “The great unequalizer: initial health effects of COVID-19 in the United States”: What was the research question, main observations and what were the main findings?
- Minorities tend to be more strongly affected during pandemics
- Mortality rates between White and Black Americans widened by over 80% during the first year of the covid 19 pandemic
- Hard to estimate the contribution of the different factors to overall mortality levels
- Excess deaths in 2020 are higher among Blacks and Hispanics of all age groups
- Age-adjusted mortality rates tend to widen the gap as minorities are younger
Socio-economic determinants: minorities live in areas that are more highly affected by
COVID and in bigger households, more likely to be frontline workers, low wealth and
less access to welfare programs do not allow labor force withdrawal
-Medical determinants: minorities have a higher number of comorbidities that heighten the risk of severe COVID (diabetes, obesity, hypertension); higher prevalence of COVID reduces the ability of healthcare facilities to treat non-COVID patients
- Consistent with minorities facing institutional disadvantages including inconsistent providers, lower-quality care, and systemic racism.
IMPORTANT RESULTS:
Main hypothesized cause is the lack of trust in healthcare providers among minorities.
Consider the paper - Alsan, Marcella, Owen Garrick, and Grant Graziani “Does diversity matter for health? Experimental evidence from Oakland”: What was the research question, main observations and what were the main findings?
The study reports the results from a randomized experiment where black men from Oakland were offered a set of preventative health services for free where men get assigned to either White or Black physician.
- Outcomes studied relate to take-up of preventive care
IMPORTANT RESULTS:
- Results show that take-up of services is similar between those assigned to black and white doctors before interaction
- After interaction, black men assigned to black doctors are 18 percentage points more likely to take-up preventive services than those assigned to white doctors
- Overall, evidence that black men trust more same-race physicians and are more likely to talk to them about their health issues
- No evidence that this is driven by higher perceived quality of black physicians or the black physicians putting in more effort.
Consider the paper - “Sex, Drugs, and RD: Missing Innovation from Regulating Female Enrollment in Clinical Trials” : What was the research question, main observations and what were the main findings?
From 1977 to 1993, the U.S. Food and Drug Administration (FDA) instructed drug developers to exclude pre-menopausal women (up to age 50) as human subjects in early-stage clinical trials
RQ: : How does a policy that restricted female enrollment in drug trials shape the direction of drug innovation in the late 20th century?
Hypothesis:
- If pre-menopausal women are excluded from early-stage trials, reduces the informativeness of trial outcomes for women
- Firms now have to choose:
- conduct additional early-stage trials, increasing early stage trial costs OR proceed to late-stage trials with less certainty, risking substantial financial commitments.
- Drug development costs for “female-focused” diseases more expensive, fewer female-focused drugs gaining approval
Exploiting the policy removal (IMPORTANT RESULTS):
-Share of drug patents with a female focus increased 1.5-2 percentage points (38-51%).
- fewer female-focused drug candidates entered development during the guidance period: 17-58 more would have been approved
What is the problem with low gender diversity in the medical workforce?
▶ Female patients, relative to male patients, receive less health care for similar
medical conditions
▶ More likely to be told by providers that their symptoms are emotionally
driven rather than arising from a physical impairment
▶ Low and Pistaferri (2019) show female applicants for disability insurance are
20 p.p. more likely to be denied benefits
▶ One policy solution is to diversity the medical workforce
▶ Two-thirds of U.S. physicians are male
▶ 59% of doctors in the NL are female
Consider the paper - “Gender Differences in Medical Evaluations: Evidence from Randomly Assigned Doctors”: What was the research question, main observations and what were the main findings?
- Random assignment of doctors to patients within the Texas workers’ compensation insurance system.
-Insurers and injured workers may request independent medical evaluations to settle disputes over an injured worker’s impairment level
-An injured worker is eligible for continued cash benefits if the worker has an injury-related disability at the time of the independent exam
IMPORTANT RESULTS:
-Female patients randomly assigned a female doctor are more likely to be evaluated as having a continued disability with no impact on outcome for male patients
- Male doctors evaluate female patients against a stricter standard than male patients and female doctors apply similar standards to both.
Why are maternity and maternal mortality important?
Historically, maternal mortality is one of the leading causes of death for women
▶ Until 1930s, second-largest cause of death in the U.S.
▶ Netherlands: In 1950, 105 maternal deaths per 100 thousand live born babies, since 2007, less than 5 (so fewer than 10 per year)
▶ MMR in low-income countries: 430 per 100,000 live births versus 13 per 100,000 live births in high income countries.
Even today, more than a third of women experience lasting health problems
after childbirth (e.g. pain, postpartum depression)
▶ Prior to introduction of formula, infants are exclusively breastfed -typical woman would then be nursing for a substantial amount of time during childbearing years
▶ Limits women’s participation in market work
Declines in maternal morbidity can explain much of the increase in female employment during childbearing ages over the 20th century
Consider the paper - “The Labor Market Returns to Delaying Pregnancy”: What was the research question, main observations and what were the main findings?
RQ: What is the effect of an unplanned pregnancy?
- This paper considers Swedish women who want to delay pregnancies are using long- acting reversible contraceptives (LARCs)
- About 0.5-1.5% of women using LARC will get pregnant in a year
- They look at the career outcomes of those whose LARC failed and experienced a pregnancy
Unplanned pregnancies have a substantial, negative, and lasting consequences on the careers of previously childless women
Seven years after…
▶ Earnings are 15% lower
▶ Probability of working in an occupation requiring medium, high, or
managerial skills is almost 20% lower, than if unplanned pregnancy did not occur
▶ Effects are larger for younger women and for women who are enrolled in education
Consider the paper - “The Impact of Denying a Wanted Abortion on Women and Children”: What was the research question, main observations and what were the main findings?
in 2006, Columbia decriminalized abortion in cases where a pregnancy threatens a woman’s physical, mental, emotional or social health, involves sever fetal malformations, or is a result of rape, incest, or unwanted insemination.
Implementation of law has been consistent but stigma remains
Women can protect their right to abortion by filing a legal claim called a tutela which are randomly assigned to judges who’s leniency toward abortion cases vary
- Data found that women who sought tutela were, on average, 28 years old and 20% were teenagers or younger
IMPORTANT RESULTS:
Female judges are 20 pp less likely to deny a woman wanting abortion
- Denying access to abortions results in a 106% increase in following through with the pregnancy
- Denying increases probability of death by 157%
- Deaths are driven by septicemia and infections, suggesting women are turning towards unsafe abortion procedures, which can lead to fatal complications.
- Children are more likely to grow up in poverty
- Children born before their mother sought abortion are less likely to attend school and more likely to engage in child labor.
Describe the economic models of the household.
Unitary model:
- Household decision making models as a single decision making unit
Collective model: Individuals within a household may have power to influence household decisions in their own favor
- Bargaining power: Anything that allows a particular individual to influence household decisions (determined by the outside options)
- Outside option: amount of utility a person would be able to obtain outside the household
Things that affect bargaining power:
▶ Current Income
▶ Potential Income if left household
▶ Laws (divorce laws, anti-discrimination laws, etc.)
▶ Social Norms
Theory: Domestic violence is also determined by bargaining power
▶ Abuser’s utility is increasing with violence
▶ Victim’s utility is decreasing with violence
Implication When victim has less bargaining power, then violence with increase.
When victim has more bargaining power, then violence will decrease.
Consider the paper -“The Gender Wage Gap and Domestic Violence”: What was the research question, main observations and what were the main findings?
- Looks at effect of potential income on domestic violence
- Changes in gender wage gap that reflect local sex-specific labor demand
- Overcomes endogeneity concerns of looking at individual relationship between wage and violence
- victims may have lower income because of abuse
IMPORTANT RESULTS:
Reduction in the gender wage gap can explain 9% of the decline in domestic violence, measured by female hospitalizations, witnessed between 1990 and 2003
Consider the paper -“The Dynamics of Abusive Relationships”: What was the research question, main observations and what were the main findings?
RQ: What is the impact of co-habiting with an abusive partner on victims’ economic outcomes?
- Link every police report in Finland to administrative records on employment cohabitation status
- Look at how employment earnings change around the time of cohabiting with perpetrator
- Compare victims outcomes to those of observationally identical women who begin cohabitation spells with observationally identical partners (DiD).
IMPORTANT RESULTS:
- 6.7 pp lower employment rates compared to matched control women
- Victims’ earnings fall by €1,600 a year on average in the five years following cohabitation, corresponding to a 12% loss
- The drop in earning and employment is not present for other cohabitations of the victim
- This pattern is present for all relationships of the perpetrator, not just the one that gets reported to the police for violence
To rationalize these findings:
- Women do not perfectly observe their partners’ type
- Abusive men have incentive to use economic suppression to sabotage women’s outside options and their ability to later exit the relationship
What are rational decision making assumptions that do not hold?
The rational decision making assumption with respect to behavioral economics that do not hold are:
- people behave as planned
- people evaluate uncertain alternatives by taking into account the expected final utility over final outcomes. (e.g. the framing of alternative should not matter)
- people care only about themselves (other’s salary does not affect your happiness regarding your own salary)
What are the behavioral definitions of risk attitudes?
- A person is risk averse if they prefer the expected value of a lottery over the lottery
- A person is risk seeking if they prefer the lottery over its expected value
- A person is risk neutral if they are indifferent between a lottery and its expected value
Consider the paper by Björkman Nyqvist et al. (2018_ to study the effect of a public health intervention (in the form of a lottery program) on sexually transmitted infections in Lesotho: What was the research question, main observations and what were the main findings?
Previous studies show that the incentive schemes paid using fixed amounts conditional on testing negative for HIV are not effective in reducing HIV transmission.
IDEA: providing incentives in the form of a lottery (small probability to win a big prize will help target risk seeking individuals who are more likely to engage in risky sex
1,821 young Basotho respondents were given lottery with a small probability to win a large prize if they tested negative for both syphilis and trichomoniasis at each of the seven times they could (voluntarily) participate in the program.
- After 2 years, the HIV incidence rate was 9.2% in the treatment group , compared to 11.7% in the control group, a significant 21.4% reduction.
- The program was especially effective for risk seekers.
What is reference dependence?
Consider the paper by Murayama et al. (2023) to increase the uptake of health check-ups in Tokyo: What was the research question, main observations and what were the main findings?
People evaluate outcomes relative to a reference point and attitudes towards risk depend on whether outcomes are (framed as) gains or losses.
- Reference dependence: risk preferences depend on whether outcomes are above or below a reference point.
The study recorded 3530 respondents who received a fecal occult blood test (to test for colorectal cancer) and one of the following messages by mail:
Message A: “if you take a screening this year, you will receive a screening kit next year”
Message B: “if you do not take a screening this year, you will not receive a screening kit next year”
Framing the message as a loss instead of a gain increased the uptake percentage. contradicting the behavior of Homo Economicus.
What is prospect theory?
Reigning descriptive theory of decision making under risk, incorporating sensitivity to probabilities and reference dependence
Sensitivity to probabilities:
- overweighting of small probabilities relative to intermediate/ large probabilities
- different weighting of probabilities for gains and losses
Reference dependence:
- outcomes evaluated relative to a reference point
- reference point typically assumed to be status quo
- concave utility for gains, convex utility for losses
- losses weigh more heavily than gain = loss aversion
What is present bias?
Consider the paper by Savani (2019) to increase adherence to a health intervention program in London: What was the research question, main observations and what were the main findings?
Present bias: people are overly sensitive to the present
196 respondents were recruited to take part in a 11-week public weight loss program
Participants were randomly allocated to a control condition or a treatment condition.
- In the treatment condition, N = 97 participants were offered a personalized commitment contract that they were advised to keep it somewhere they would see it on most days
Respondents in the treatment group were significantly more likely to attend and complete the program, with some suggestive evidence that the contract worked especially well for people with more myopic health attitudes.
Commitment contracts enhanced adherence to the program, contradicting the expected behavior of Homo Economicus.
Consider the paper by Sydnor (2010), looking at data on consumers’ choices of deductibles for home insurance: What was the research question, main observations and what were the main findings?
Study looked at data on consumers’ choices of deductibles for home insurance
83% of consumers were willing to pay an additional $99.91 extra in yearly insurance premium to reduce the deductible from $1000 to $500 for home insurance, while the average claim rate is roughly 5%
Under expected utility, this implies an implausible degree of diminishing marginal utility
Can be explained by overweighting of small probability and reference dependence: people overweight the small probability of a loss and are overly sensitive to losing their house (loss aversion)
We have discussed three insights form behavioral economics that are very relevant for choice behavior in the health domain:
Insight 1: Sensitivity to Probabilities people are overly sensitive to small probabilities, relative to moderate and large probabilities, which can explain why providing lottery incentives was successful in reducing the HIV incidence rate in Lesotho.
Insight 2: Reference Dependence risk preferences depend whether outcomes are above or below a reference point, which can explain why framing a message to take a health check-ups as a loss instead or a gain increased the uptake percentage.
Insight 3: The Present Bias people are overly sensitive to the present, which can explain why commitment contracts enhanced adherence to a health intervention program in London
