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3rd Year > Demand for Health > Flashcards

Demand for Health Flashcards

1
Q

Determinants of health?

A

Medical intervention, education, diet, exercise, heating/housing

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2
Q

How is health demand an individual choice?

A
  • Rational, forward looking
  • Constrained by resources
  • Utility maximisers
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3
Q

What did the Grossman Model (1972) link?

A

Model of health production, sets a framework for how resources, behaviour and health all link

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4
Q

Properties of the items in Grossman’s model?

A

Health is a commodity
Medical care is derived demand
Get value for the consumption properties (utility)
Get value for investment properties (indirect utility from extra time for earning/commodities)

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5
Q

What type of stock is health?

A

A depreciating stock, which falls in the absence of investment (medical care/exercise) sort of like a form of capital

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6
Q

Who consumes and produces health?

A

Individuals- are both consumers and producers of health

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7
Q

Why do we not engage in unlimited health investment?

A

It is timely and costly, we lack the resources

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8
Q

How does the Grossman model form predictions?

A

By looking at health levels based on changes in price of investments, wages, tech, age and education

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9
Q

What is the basic Grossman equation? List the variables

A 
U = U (xHo , ... , xnHn, Zo.... Zn)
U = (Ht, Zt)
T= Lifespan up to n
H= Healthy days
Z= Consumption of commodity 
x = Healthy days per unit of of health (Ht)
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10
Q

2 household production functions and their variables for health and household production?

A

Health production: It = It (Mt, THt; Et)
Other commodities: Zt = Zt (Xt, TZt; Et)

It= Investment in extra health stock
Mt = Medical care ( X is good to produce stock)
Et = Human capital other than health (Education)
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11
Q

Time constraint for health?

A

Work + Ill + Producing health + Time Consuming = Healthy days available + Ill days = 365

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12
Q

What is the lifetime budget constraint?

A

The PV of outlays on goods to the present value of earnings and assets

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13
Q

What is the law of motion of health stock?

A

The rate of which health depreciates varies, exogenous and dependant on age

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14
Q

Grossman equation for death?

A

Hn < Hmin
Hmin = Health to survive

Investment returns too low, and depreciation too large so people chose not to invest in health

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15
Q

What does a pure consumption Grossman model say?

A

Higher investment = better health stock, giving direct utility

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16
Q

What does a pure investment Grossman model say?

A

Higher investment = better health stock, giving higher income

At the margin, Rate of investment = cost of capitial

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17
Q

What increases the costs in the Grossman model?

A

Higher cost of investment
Higher interest rate
Higher depreciation rate

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18
Q

What is the cost of health capital?

A

How much health costs

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19
Q

What is the MEC curve?

A

The marginal efficiency of capital investments describes the demand for health at the margin (return on investment = cost)

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20
Q

Describe the MEC curves?

A

Cost of capital: Vertical
Health stock:Horizontal
Foregone Interest + Depreciation: Line across, near the bottom

MEC is a downward sloping curve, intersection of the two lines is the health stock

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21
Q

What does the Grossman model predict about age?

A
  • Depreciation rate increases with age (this horizontal line shifts up)
  • Healthy days decreases to maintain equity (intersection is further to left)
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22
Q

What effect does increasing age have on the demand for health care (investment)?

A

Ambigious, as age/depreciation increase, returns to investment decrease.

If investment returns are larger than decrease in health stock = more investment

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23
Q

Grossman quote on ageing and investment in health?

A

Biological factors associated with ageing raise the price of human capital and cause individuals to substitute away from future health until death is chosen

24
Q

What effect does an increase in wages have for the demand for health?

A
  • Increases the MB of health capital
  • Income effect, increases demand for health)
  • MEC shifts to the right
  • Offset by higher opportunity costs to produce health
25
Q

What effect does an increase in wages have for the demand for health care?

A
  • Rewards for health greater (higher wages)
  • Substitution effect, spend more on health care
  • Increases demand for health care
26
Q

What effect does an increase in education have for the demand for health?

A
  • Knowledge raises the marginal product of healthcare (compliant, efficient, better choices, lower depreciation rate)
  • Pushes MEC to the right
  • More healthy days available (higher curve)
27
Q

What effect does an increase in education have for the demand for healthcare/ investment in health?

A
  • Increased productivity to produce health so demand falls

- MB of investment increases, so demand may increase (empirical studies show this to be true)

28
Q

Is the relationship between education and health casual?

A

Causality is hard to establish, could be linked to time preferences. Need to look into health behaviours more

29
Q

What reforms does Albouy (2009) investigate?

A

French reforms raising the leaving age, looks at changes in survival rates
Zay 13-14 in 1923
Berthoin 14-16 in 1953

30
Q

What does Albouy (2009) conclude in the study?

A

No significant effect of reform on mortality

31
Q

What might be the problem with Albouy (2009) study, why did it show no link?

A

-Mortality may not show other factors of health
-Health returns may be more prominent at younger ages
-Perhaps the additional years were not overly
informative curriculums

32
Q

What reforms did Lleras-Muney explore (2005)?

A

Explore state changes to compulsory schooling laws, natural experiment, by exploring mortality rates

33
Q

What did did Lleras-Muney conclude (2005)?

A

One additional year of education lowers the probability of dying in the next 10 years by between 1.3 and 3.6% points

34
Q

Caution using the Lleras-Muney (2005) US paper to create new policies?

A

Paper analysed low initial levels of education, unclear how to generalise to higher baseline levels

35
Q

What did Cutler and Lleras-Muney (2010) do a study on?

A

Studied the mechanisms through which education might impact health behaviours. Using a range of US and UK data sources

36
Q

Richards (1998) quote on the effect of education/mortality?

A

“In 1990, a 25-year-old male college graduate could expect to live another 54 year. A high school dropout of the same age could expect to live 8 years fewer.”

37
Q

How strong is the link with education and health?

A

Difference in life expectancy by education holds for every demographic group, and is persistent over time

38
Q

Key health facts about socio-groups and smoking (Lleras-Muney and Cutler, 2010)?

A

-Each year of education = a 3% point reduction in the prob of smoking
-Effect is non-linear, smoking is greater at higher levels
of education

39
Q

Key health facts about socio-groups and obesity?

Lleras-Muney and Cutler, 2010

A

Each education year reduces prob of being obese by 1.4%. Effect is non-linear - obesity declines more for people with over 12 years of education

40
Q

What is the link between heavy drinking (5 drinks or more) and education?

A

Each additional year of education lowers prob of heavy drinking by 1.8%. Better educated more likely to drink but less likely to drink heavily

41
Q

What is the link between preventative behaviours and education?

A

-More likely to listen to advice, attend screenings, have jabs etc

42
Q

Is there a link between seatbelt use and education?

A

Better educated more likely to wear seat belts regularly (increases by around 3.3% for each year of education).
Harms of not wearing seat belt are widely known and
costs are very small

43
Q

Does income explain some of the education effect on behaviour?

A
  • Income allows the purchase of more goods that protect health.
  • Controlling for income the effect of education reduces the effect on health behaviours by around 12%
44
Q

How much do material resources impact for education on health behaviours?

A

Material resources are estimated to account for around 20% of the impact of higher education on health behaviours

45
Q

Do prices affect health behaviours?

A

Price is not a determinant of health behaviours, not connected with response (E.g. seat belt is free)

46
Q

How much do knowledge and cognition account for health behaviours?

A

Between 5 to

30% of the education gradient in behaviours

47
Q

Do time preferences explain the link between education and health?

A

Attribute very little of the education gradient in health behaviours to preferences over time and risk

48
Q

Does personality (self-esteem, self-control etc) explain the education/health links?

A

Personality traits account for little of the education gradient;

49
Q

Does social integration (relationships, friends etc) explain the education/health links?

A

Modest effect: Overall weighted average effect is 7% (US); 15% (UK)

50
Q

What did Zweifel say about health being an asset?

A

Health is a hugely valued asset and a pre-requisite for other activities

51
Q

What did Zweifel say the Grossman model fails to account for?

A

Ignores stochastic shocks such as a major accident or illness

52
Q

Mokdad quote on US deaths?

A

Nearly 1/2 of US deaths are attributed to behavioural factors

53
Q

Why did Schultz (1975) suggest a link exists between education and health?

A

Education enhances individuals ability to deal with disequilibrium

54
Q

Why did Rosenzweig (195) say education helps health?

A

Education improves an individuals ability to decipher information

55
Q

What did Schillinger (2006) find about education, literacy and health?

A

In a low-income population with diabetes, literacy mediated the relationship between education and glycemic control.

Literacy perhaps more important?

3rd Year (7 decks)

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