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on Health Economics |
| By: | Hana Bataineh (University of Ottawa, ON, Canada); Rose Anne Devlin (University of Ottawa, ON, Canada); Vicky Barham (University of Ottawa, ON, Canada) |
| Abstract: | Using the National Population Health Survey, a nationally representative longitudinal data set spanning 16 years, we analyze if the presence of perceived unmet health-care (UHC) needs affects health outcomes paying close attention to the potential endogeneity of this problem. Five different health-related outcomes are examined. We find clear and robust evidence that the presence of UHC either two-years previously or anytime in the past, affects negatively the current health of the individual – controlling for a host of other influences. The age of the individual does not affect this relationship. |
| Keywords: | Unmet health care; health outcomes; instrumental variables; medication use. |
| JEL: | I12 I10 I19 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:ott:wpaper:1803e&r=hea |
| By: | Titus J. Galama; Adriana Lleras-Muney; Hans van Kippersluis |
| Abstract: | Education is strongly associated with better health and longer lives. However, the extent to which education causes health and longevity is widely debated. We develop a human capital framework to structure the interpretation of the empirical evidence. We then review evidence on the causal effects of education on mortality and its two most common preventable causes: smoking and obesity. We focus attention on evidence from Randomized Controlled Trials, twin studies, and quasi-experiments. There is no convincing evidence of an effect of education on obesity, and the effects on smoking are only apparent when schooling reforms affect individuals’ track or their peer group, but not when they simply increase the duration of schooling. An effect of education on mortality exists in some contexts but not in others, and seems to depend on (i) gender; (ii) the labor market returns to education; (iii) the quality of education; and (iv) whether education affects the quality of individuals’ peers. |
| Date: | 2018–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:24225&r=hea |
| By: | Alex-Petersen, Jesper (Lund University); Lundborg, Petter (Lund University); Rooth, Dan-Olof (Stockholm University) |
| Abstract: | We examine the long-term impact of a policy that introduced free and nutritious school lunches in Swedish primary schools. For this purpose, we use historical data on the gradual implementation of the policy across municipalities and employ a difference- in-differences design to estimate the impact of this lunch policy on a broad range of medium and long-term outcomes, including lifetime income, health, cognitive skills, and education. Our results show that the school lunch program generated substantial long-term benefits, where pupils exposed to the program during their entire primary school period have 3 percent greater life-time earnings. In addition, we find the effect to be greater for pupils that were exposed at earlier ages and for pupils from poor households. Finally, exposure to the school lunch program had substantial effects on educational attainment and health and these effects can explain a large part of the return to school lunches. |
| Keywords: | nutrition, early life, childhood, long-term, income, causal |
| JEL: | I12 I38 J24 |
| Date: | 2017–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11234&r=hea |
| By: | Johnston, David W. (Monash University); Shields, Michael A. (Monash University); Suziedelyte, Agne (University of London) |
| Abstract: | A lack of job security is an increasingly prevalent characteristic of modern labour markets, and there is evidence that recent financial crises have exacerbated this issue. In this paper, we assess how exogenous changes in the macroeconomic environment affect workers' perceived job security, and the impact of job security on measures of mental and physical health. To identify these effects, we exploit variation in world commodity prices over the period 2001–15, and analyse 15 waves of individual-level panel data that includes unusually detailed classifications of mining workers. We find that commodity price movements drive changes in perceived job security, which in turn significantly and substantively affects the mental health of workers. In contrast, we find no effects on physical health. Our results imply that the estimated welfare costs of recessions are substantially larger when the effects of job insecurity on the health of workers is considered. |
| Keywords: | job security, health, macroeconomic conditions, panel data |
| JEL: | J11 J21 I31 |
| Date: | 2017–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11251&r=hea |
| By: | Apouey, Bénédicte (Paris School of Economics); Guven, Cahit (Deakin University); Senik, Claudia (Paris School of Economics) |
| Abstract: | Do people form correct expectations about the impact of retirement on their health? This paper looks at unexpected health shocks that hit people after they retire. Using data from the Household, Income and Labour Dynamics in Australia survey (waves 2001-2014), we construct measures of unexpected health shocks for each year, using information on respondents' views about the expected and past evolution of their health status. By definition, unexpected health shocks are immune to the problem of reverse causality (running from health condition to retirement). Our findings indicate that retirement increases the likelihood of positive health shocks and decreases the probability of negative shocks for men, with no clear results for women. These shocks are mirrored by variations in life satisfaction of the same nature (e.g. increased life satisfaction in case of unexpected positive health shocks). Other indicators of mental and physical health taken from the SF-36 vary in the same way, i.e. improve unexpectedly after retirement for men. These findings suggest that, at least in the case of men, people's desire to retire may not be based on perfectly correct expectations about the impact of this move, but is aligned with its actual consequence: retirement exerts a positive causal impact on health. |
| Keywords: | life satisfaction, health shocks, Australia, HILDA, health, retirement |
| JEL: | I12 I31 J26 |
| Date: | 2017–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11226&r=hea |
| By: | Zeltzer, Dan (Tel Aviv University) |
| Abstract: | In this paper, I assess the extent to which the gender gap in physician earnings may be driven by physicians' preference for working with specialists of the same gender. By analyzing administrative data on 100 million Medicare patient referrals, I provide robust evidence that doctors refer more to specialists of their same gender, a tendency known as homophily. I propose a new measure of homophily that is invariant to differences between the genders in the propensity to refer or receive referrals. I show that biased referrals are predominantly driven by physicians' decisions rather than by endogenous sorting of physicians or patients or by gender differences in the labor supply. As 75% of doctors are men, estimates suggest biased referrals generate a 5% lower demand for female relative to male specialists, pointing to a positive externality for increased female participation in medicine. |
| Keywords: | networks, referrals, gender, physician markets |
| JEL: | I11 J16 L14 |
| Date: | 2017–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11230&r=hea |
| By: | Dhaval M. Dave; Daniel Dench; Michael Grossman; Donald S. Kenkel; Henry Saffer |
| Abstract: | Only recently introduced into the U.S. market, e-cigarettes have been aggressively promoted, and use is increasing rapidly among both adults and youths. At the heart of the regulatory debate are fundamental questions regarding whether e-cigarettes will draw cigarette smokers away from a dangerous habit or lure new initiates into tobacco use. We provide some of the first causal evidence on whether e-cigarette advertising on television and in magazines (which comprise about 90% of total media spending on e-cigarettes) encourage adult smokers to quit. We find that the answer to this question is a yes for TV advertising but no for magazine advertising. Our results indicate that a policy to ban TV advertising of e-cigarettes would have reduced the number of smokers who quit in the recent past by approximately 3%, resulting in roughly 105,000 fewer quitters in that period. On the other hand, if the FDA were not considering regulations and mandates that would likely eliminate many e-cigarette producers during our sample period, e-cigarette ads might have reached the number of nicotine replacement therapy TV ads during that period. That would have increased the number of smokers who quit by around 10%, resulting in an additional 350,000 quitters. |
| JEL: | I18 |
| Date: | 2018–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:24277&r=hea |
| By: | Neupane, Sunisha; Boutilier, Zoe; Kickbusch, Ilona; Mehdi, Ali; Sangiorgio, Miriam; Told, Michaela; Taylor, Peter |
| Abstract: | Ensuring "health for all" remains a persistent and entrenched global challenge. G20 governments are in a position to elevate the priority accorded to health, and acknowledge the centrality of health to attaining the SDGs. The authors call on G20 leaders to build nations that are more inclusive and less divided, by: adopting a Health- in-All-Policies approach, prioritizing the most vulnerable, engaging citizens in policy processes, and filling health data gaps. |
| Keywords: | sustainable development goals,SDGs,goal 3,global health,engagement,health policy |
| JEL: | I1 I18 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifwedp:201814&r=hea |
| By: | Kolpakova S.V (National Research University Higher School of Economics) |
| Abstract: | This paper examines the effects of reforms in Russian mental health care (MHC) delivery since 1991, namely how it has developed; how priorities, targets and means of delivery have changed; which problems were considered the main ones; and how ongoing changes have affected the system of delivery. An analysis of policy documents and of psychiatric journals was used in conducting this research and also in understanding any changes that had occurred. The results indicate that some transformations in MHC organization took place, while others, mainly regarding patient related issues, were still being neglected by policy makers |
| Keywords: | MHC policy, psychiatric journals, Soviet times, Russia |
| JEL: | I1 I18 I19 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:hig:wpaper:14/psp/2017&r=hea |
| By: | Ruth Aston |
| Abstract: | This paper provides an overview of trends in physical health outcomes of young people over the last several decades. It makes the argument for the importance of physical health and well-being for the individual and society, including its role in education outcomes. The paper then examines interventions, identifying common factors of effective intervention design to improve physical health among young people. It ends with a discussion of remaining gaps in our knowledge and the implications of this body of research on education, communities and families. |
| Date: | 2018–02–15 |
| URL: | http://d.repec.org/n?u=RePEc:oec:eduaab:170-en&r=hea |
| By: | Melvin Stephens, Jr.; Desmond J. Toohey |
| Abstract: | While economists have posited that health investments increase earnings, isolating the causal effect of health is challenging due both to reverse causality and unobserved heterogeneity. We examine the labor market effects of a randomized controlled trial, the Multiple Risk Factor Intervention Trial (MRFIT), which monitored nearly 13,000 men for over six years. We find that this intervention, which provided a bundle of treatments to reduce coronary heart disease mortality, increased earnings and family income. We find few differences in estimated gains by baseline health and occupation characteristics. Reductions in serious illnesses and work-limiting disabilities likely contributed to the observed gains. |
| JEL: | I12 J24 |
| Date: | 2018–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:24231&r=hea |
| By: | Sandy Tubeuf (Academic Unit of Health Economics, Leeds Institute of Health Sciences, University of Leeds); Eirini-Christina Saloniki (Centre for Health Services Studies and PSSRU, University of Kent, UK); David Cottrell (Leeds Institute of Health Sciences, University of Leeds, United Kingdom (UK)) |
| Abstract: | Objective - This paper presents alternative spillover quantification methods in the context of a randomised controlled trial comparing family therapy with treatment as usual as an intervention for self-harming adolescents, and discusses the practical limitations of those methods. Methods - The trial followed a sample of 754 participants aged 11 to 17 years. Health utilities are measured using answers to EQ-5D-3L for the adolescent and to HUI2 for one parent at baseline, 6 and 12 months. We use regression analyses to evaluate the association between parent’s and adolescent’s health utilities, controlling for additional health assessment for the adolescent, type and number of self-harm events as well as variables for both the adolescent and the parent. Cost-effectiveness over a 12-month period is presented using mean incremental cost-effectiveness ratios. Results - We find that the parent’s health utility increased over the duration of the trial and is significantly and positively associated with adolescent’s health utility at 6 and 12 months only. When considering adolescents’ health gain only, the ICER is £45,330 per QALY. When including health spillovers to one parent, the ICERs estimates range from £33,690 per QALY to £45,330 per QALY and can also be a dominated option depending on the quantification method used. Conclusion - We argue that the use of a single disutility value for any parent denies the heterogeneity observed in parents of self-harming adolescents and ignores the QALY gain of parents over the duration of the trial. We demonstrate how adding QALY gains for both the adolescent and the parent might also lead to a dilemma of judging an intervention costeffective when it benefits the rest of the family but not the patient. We finally propose the use of a household welfare function along with an equivalence scale to measure health spillover for cost-effectiveness analysis. |
| Keywords: | economic evaluation; self-harm; adolescent; EQ-5D-3L; HUI2; spillovers |
| JEL: | D62 I10 I31 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:lee:wpaper:1803&r=hea |
| By: | Yan Meng; Xueyan Zhao; Xibin Zhang; Jiti Gao |
| Abstract: | Inequality between private and public patients in Australia has been an ongoing concern due to its two tiered insurance system. This paper investigates the variations in hospital length of stay for hip replacements using Victorian Admitted Episodes Dataset from 2003/2004 to 2014/2015, employing a Bayesian hierarchical random coefficient model with trend allowing for structural break. We find systematic differences in the length of stay between public and private hospitals, after observable patient complexity is controlled. This suggests shorter stay in public hospitals due to pressure from Activity-based funding scheme, and longer stay in private system due to potential moral hazard. Our counterfactual analysis shows that public patients stay 1.4 days shorter than private in 2014, which leads to the 'quicker but sicker' concern that is commonly voiced by the public. We also identify widespread variations among individual hospitals. Sources for such variation warrant closer investigation by policy makers. |
| Keywords: | Gibbs sampler, hierarchical random coefficients, length of stay, hospital ranking. |
| JEL: | C11 H51 I14 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:msh:ebswps:2017-20&r=hea |
| By: | Janisch, Laura M. |
| Abstract: | Mental diseases are a widespread phenomenon and trigger massive direct and indirect costs. Using Australian household survey data this study analyzes assimilation of immigrants' mental health over time. Therefore, this study contributes to the literature since previous literature has focused primarily on the assimilation of immigrants' physical health status. We find that the probability of suffering from poor mental health increases with time since migration. In addition, female immigrants display a 4 percentage points lower risk of suffering from poor mental health when entering the country. Furthermore, immigrants with English as mother tongue have a lower likelihood of suffering from poor mental health when compared to their counterparts with non-English mother tongues. |
| Keywords: | immigration,mental health,assimilation |
| JEL: | I14 J15 O15 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:rwirep:728&r=hea |
| By: | Elliott Fan (Department of Economics, National Taiwan University); Hsienming Lien (Department of Public Finance, National Chengchi University); Ching-to Albert Ma (Boston University) |
| Abstract: | Taiwanese Labor, Government Employee, and Farmer Insurance programs provide 5-6 months of salary to enrollees who undergo hysterectomy or oophorectomy before their 45th birthday. These programs result in more and earlier treatments, referred as, respectively, inducement and timing effects. Difference-in-difference and nonparametric methods are used to estimate these effects on surgery hazards between 1997 and 2011. For Government Employee and Labor Insurance, inducement is 11-12% of all hysterectomies, and timing 20% of inducement. For oophorectomy, both effects are insignificant. Induced hysterectomies increase benefit payments and surgical costs, at about the cost of a mammogram and 5 pap smears per enrollee. |
| Keywords: | disability insurance, moral hazard, hysterectomy, oophorectomy |
| JEL: | I00 I10 I12 I18 |
| Date: | 2017–10 |
| URL: | http://d.repec.org/n?u=RePEc:bos:wpaper:wp2018-001&r=hea |
| By: | Motkuri, Venkatanarayana; Mishra, Rudra Narayana |
| Abstract: | This is an attempt in examining and carrying out the discussion and debate on regulations and prince control in pharmaceutical industry in the Indian context. Herein the above discussion presented the perspectives of the industry and the welfare of the poor population along with alternative options. Given its critical nature in existence of human race while protecting, maintaining and restoring health of human being, regulations on pharmaceutical industry are needed to ensure safety, quality and effectiveness of drugs they develop and produce. As pharmaceutical industry involved with the phenomenon of Induced-demand and it is one of the industries where the price competition may not be prevailing, hence price controls on certain essential and life-saving drugs are needed especially in the Indian context. |
| Keywords: | Drugs, Pharmaceuticals, Industry, India, Drug Development, Drug Discovery, Drug Marketing, Pharmaceuticalisation, Drug Regulations, Drug Price Control |
| JEL: | I10 I11 I18 |
| Date: | 2018–02 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:84318&r=hea |
| By: | Gustav Kjellsson (University of Gothenburg); Dennis Petrie (Monash University); Tom (T.G.M.) van Ourti (Erasmus University Rotterdam; Tinbergen Institute, The Netherlands) |
| Abstract: | The measurement of health disparities is a key component for the assessment of health systems. One aspect of these disparities – which hitherto has received limited attention – is the risk people face about their future health. This paper integrates risk into the standard inequality measurement which measures the extent to which disparities in realized health are systematically associated with income. It develops a rank dependent inequality index that considers not only inequalities in expected future health but also the dispersion of individuals’ future health prospects. It is useful when a social planner wants to account for risk averse preferences in the assessment of income-related health inequalities. The empirical application using Australian longitudinal data highlights that neglecting risk underestimates income-related health inequalities since the poor were not only expected to be in worse health in the future, but also faced greater dispersion in their future health prospects compared to the rich. |
| Keywords: | health inequality; risk; concentration index |
| JEL: | D63 I10 |
| Date: | 2018–01–26 |
| URL: | http://d.repec.org/n?u=RePEc:tin:wpaper:20180007&r=hea |
| By: | Pietro Biroli (University of Zurich); Teodora Boneva (University of Cambridge); Akash Raja (London School of Economics and Political Science); Christopher Rauh (University of Cambridge, INET Institute) |
| Abstract: | Childhood obesity has adverse health and productivity consequences and poses negative externalities to health services. Its increase in recent decades can be traced back to unhealthy habits acquired in the household. We investigate whether parental beliefs play a role by eliciting beliefs about the returns to a recommended-calorie diet and regular exercise using hypothetical investment scenarios. We show that perceived returns are predictive of health investments and outcomes, and that less educated parents perceive the returns to health investments to be lower, thus contributing to the socioeconomic inequality in health outcomes and the intergenerational transmission of obesity. |
| Keywords: | parental investments, Health, beliefs, Inequality, equality of opportunity, obesity |
| JEL: | D19 I10 I12 I14 |
| Date: | 2018–02 |
| URL: | http://d.repec.org/n?u=RePEc:hka:wpaper:2018-008&r=hea |
| By: | Timothy Halliday (University of Hawaii); Bhashkar Mazumder (Federal Reserve Bank of Chicago); Ashley Wong (Northwestern University) |
| Abstract: | Studies of intergenerational mobility have largely ignored health despite the central importance of health to welfare. We present the first estimates of intergenerational health mobility in the US by using repeated measures of self-reported health status (SRH) during adulthood from the PSID. Our main finding is that there is substantially greater health mobility than income mobility in the US. A possible explanation is that social institutions and policies are more effective at disrupting intergenerational health transmission than income transmission. We further show that health and income each capture a distinct dimension of social mobility. We also characterize heterogeneity in health mobility by child gender, parent gender, race, education, geography and health insurance coverage in childhood. We find some important differences in the patterns of health mobility compared with income mobility and also find some evidence that there has been a notable decline in health mobility for more recent cohorts. We use a rich set of background characteristics to highlight potential mechanisms leading to intergenerational health persistence. |
| Keywords: | Health, mobility, Inequality, health insurance, intergenerational mobility, intergenerational transmission |
| JEL: | I10 I14 J62 I13 |
| Date: | 2018–02 |
| URL: | http://d.repec.org/n?u=RePEc:hka:wpaper:2018-009&r=hea |
| By: | Arbex, Marcelo; Mattos, Enlinson |
| Abstract: | We study optimal human and health linear policies when there is a paternalistic motive to overcome present bias problems of agents with heterogeneous cognitive skills. The paternalistic intervention rewards individuals for physical capital accumulation and the combined e ect of health and human capital on future earnings. Our results highlight a novel e ect of paternalistic policies due to the interaction between present-biased preferences and cognitive skills. We illustrate numerically that this policy package is the most e ective and we analyze the relevance of agent's cognitive skills and present-biased preferences for the determination of rst-best and constrained rst-best optimal policies. |
| Date: | 2017–10 |
| URL: | http://d.repec.org/n?u=RePEc:fgv:eesptd:465&r=hea |
| By: | Dardanoni, V.;; Laudicella, M.;; Li Donni, P.; |
| Abstract: | We study hospital choice in the publicly funded National Health Service in England, using a two sample strategy to identify a structural model of demand for elective procedures. In the NHS patients are allowed to opt out from the market of free-of-charge public hospitals and choose a private provider; we find that the outside option has an important effect on competition, patient choice and elasticities compared with traditional models ignoring the private sector. Considering endogeneity of waiting-time, proper measures of quality and the existence of private sector, we find substantially different policy conclusions compared to existing hospital demand models. |
| Keywords: | hospital demand; patient choice; quality; NHS; |
| JEL: | D12 I11 I18 H51 |
| Date: | 2018–02 |
| URL: | http://d.repec.org/n?u=RePEc:yor:hectdg:18/04&r=hea |
| By: | Joseph P. Newhouse; Mary Beth Landrum; Mary Price; J. Michael McWilliams; John Hsu; Thomas McGuire |
| Abstract: | We ascertain the degree of service-level selection in Medicare Advantage (MA) using individual level data on the 100 most frequent HCC’s or combination of HCC’s from two national insurers in 2012-2013. We find differences in the distribution of beneficiaries across HCC’s between TM and MA, principally in the smaller share of MA enrollees with no coded HCC, consistent with greater coding intensity in MA. Among those with an HCC code, absolute differences between MA and TM shares of beneficiaries are small, consistent with little service-level selection. Variation in HCC margins does not predict differences between an HCC’s share of MA and TM enrollees, although one cannot a priori sign a relationship between margin and service-level selection. Margins are negatively associated with the importance of post-acute care in the HCC. Margins among common chronic disease classes amenable to medical management and typically managed by primary care physicians are larger than among diseases typically managed by specialists. These margin differences by disease are robust against a test for coding effects and suggest that the average technical efficiency of MA relative to TM may vary by diagnosis. If so, service-level selection on the basis of relative technical efficiency could be welfare enhancing. |
| JEL: | I11 I13 I18 |
| Date: | 2018–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:24289&r=hea |
| By: | Michael Darden; Ian McCarthy; Eric Barrette |
| Abstract: | A longstanding debate in health economics and health policy concerns how hospitals adjust prices with private insurers following reductions in public funding. A common argument is that hospitals engage in some degree of "cost-shifting," wherein hospitals increase prices with private insurers in response to a reduction in public payments; however, evidence of significant cost-shifting is mixed, and the rationale for such behavior is unclear. We enter this debate by examining plausibly exogenous variation in Medicare payment rates generated by two policies under the Affordable Care Act: the Hospital Readmission Reduction Program (HRRP) and the Hospital Value Based Purchasing (HVBP) program. We merge rich hospital-level information to actual private-payer payment data from a large, multi-payer database. Our data include roughly 50% of inpatient prospective payment hospitals in the United States from 2010 to 2015. We find that hospitals that faced net payment reductions from HRRP and HVBP were able to negotiate 1.5% higher average private payments - approximately $155 extra for the average acute care claim, or $82,000 per hospital, based on an average hospital penalty of nearly $146,000. We find the largest increases in payments for circulatory system (2.7%) and nervous system (3.2%) claims. We also find significant heterogeneity by payer mix, where cost-shifting is largest for hospitals with higher shares of private insurance patients. |
| JEL: | I11 I18 L2 |
| Date: | 2018–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:24304&r=hea |
| By: | Goncalves, Judite (Universidade Nova de Lisboa); Martins, Pedro S. (Queen Mary, University of London) |
| Abstract: | The growth of novel flexible work formats raises a number of questions about their effects upon health and the potential required changes in public policy. However, answering these questions is hampered by lack of suitable data. This is the first paper that draws on comprehensive longitudinal administrative data to examine the impact of self-employment in terms of health. It also considers an objective measure of health – hospital admissions – that is not subject to recall or other biases that may affect previous studies. Our findings, based on a representative sample of over 100,000 individuals followed monthly from 2005 to 2011 in Portugal, indicate that the likelihood of hospital admission of self-employed individuals is about half that of wage workers. This finding holds even when accounting for a potential self-selection of the healthy into self-employment. Similar results are found for mortality rates. |
| Keywords: | self-employment, hospitalization, sick leave, mortality |
| JEL: | I18 J24 |
| Date: | 2018–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11305&r=hea |
| By: | Stefano BOSI; David DESMARCHELIER |
| Abstract: | In this article, we embed a model of disease spread into a Ramsey model. A stock of pollution, viewed as a productive externality, affects both the disease transmission and the consumption demand. An ecofriendly government levies a proportional Pigouvian tax on production to depollute. We show the coexistence of two steady states in the long run: a disease-free and an endemic steady state. At the endemic steady state, a higher green-tax rate always reduces the pollution level. In the short run, we show the existence of limit cycles (through a Hopf bifurcation) as well as more complex dynamics of codimension two (a Gavrilov-Guckenheimer bifurcation). We complete the study with a numerical illustration of these bifurcations and a new facet of the Green Paradox: a higher tax rate can allow more scope for cycles by lowering the critical aversion to pollution and, thus, contribute to destabilize the economy and promote intergenerational inequalities. |
| Keywords: | SIS model, Ramsey model, pollution, transcritical bifurcation, Hopf bifurcation, Gavrilov-Guckenheimer bifurcation. |
| JEL: | C61 E32 O44 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:ulp:sbbeta:2018-11&r=hea |