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State and self investments in health

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  • Fichera, Eleonora
  • Sutton, Matt

Abstract

In this paper we consider how State investments can crowd out or reinforce self-investments in health using a theoretical model of insurance and protection. We apply this model to the smoking cessation decision made by individuals diagnosed with a cardiovascular disease using data from the 1998, 2003 and 2006 waves of the Health Survey of England. Prescription of lipid-lowering drugs, which increased substantially over this period, is used as the measure of State investment. Using bivariate and trivariate probit models, we allow for the endogeneity of the doctor's decision to prescribe and offer smoking cessation advice. We find that unobservable characteristics affecting the prescription of drugs are positively correlated with those affecting smoking advice and negatively correlated with those affecting the propensity to quit. Our results indicate that prescription of lipid-lowering drugs to individuals with cardiovascular disease increases the probability of smoking cessation by 20–28 percentage points.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Health Economics.

Volume (Year): 30 (2011)
Issue (Month): 6 ()
Pages: 1164-1173

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Handle: RePEc:eee:jhecon:v:30:y:2011:i:6:p:1164-1173

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Web page: http://www.elsevier.com/locate/inca/505560

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Keywords: Crowding-out; Preventative behaviour; Drugs prescription;

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References

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Cited by:
  1. John Mullahy, 2011. "Marginal Effects in Multivariate Probit and Kindred Discrete and Count Outcome Models, with Applications in Health Economics," NBER Working Papers 17588, National Bureau of Economic Research, Inc.
  2. Mullahy, John, 2011. "Marginal Effects in Multivariate Probit and Kindred Discrete and Count Outcome Models," Working Papers 201135, Geary Institute, University College Dublin.

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