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The effect of physician advice on alcohol consumption: count regression with an endogenous treatment effect

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Author Info
Donald S. Kenkel (Department of Policy Analysis and Management, Cornell University, Ithaca, NY 14853-4401, USA)
Joseph V. Terza (Department of Economics, Pennsylvania State University, University Park PA 16802, USA)

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Abstract

Although there are encouraging trends, alcohol abuse continues to be a significant public health problem. Econometric studies of alcohol demand have yielded a great deal of information for alcohol abuse prevention policy. These studies suggest that higher alcohol taxes and stricter drunk-driving policies can reduce heavy drinking and drunk driving. In this paper we explore the role physician advice plays in the campaign to prevent alcohol-related problems. Compared to alcohol taxation, physician advice is a more precisely targeted intervention that does not impose extra costs on responsible drinkers. Compared to the resource costs of arresting, processing, and punishing drunk drivers, physician advice may be a lower-cost intervention. To provide a basis for alcohol policy analysis, we use an alcohol demand framework to test whether physician-provided information about the adverse consequences of alcohol abuse shifts demand to more moderate levels. There are three aspects of our alcohol demand model that complicate the estimation: (1) the dependent variable is non-negative (it is a count variable-number of drinks consumed); (2) a non-trivial number of sample observations have zero values for the dependent variable; and (3) because the data we use is non-experimental, the treatment variable indicating receipt of advice from a physician may be endogenous. We implement an estimation method that is specifically designed to deal with these three complicating factors. Our results show that advice has a substantial and significant impact on alcohol consumption by males with hypertension, and that failing to account for the endogeneity of advice masks this result. Copyright © 2001 John Wiley & Sons, Ltd.

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Publisher Info
Article provided by John Wiley & Sons, Ltd. in its journal Journal of Applied Econometrics.

Volume (Year): 16 (2001)
Issue (Month): 2 ()
Pages: 165-184
Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Handle: RePEc:jae:japmet:v:16:y:2001:i:2:p:165-184

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Manning, Willard G. & Blumberg, Linda & Moulton, Lawrence H., 1995. "The demand for alcohol: The differential response to price," Journal of Health Economics, Elsevier, vol. 14(2), pages 123-148, June. [Downloadable!] (restricted)
  2. Gary S. Becker, 1974. "A Theory of Social Interactions," NBER Working Papers 0042, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  3. Philip J. Cook & George Tauchen, 1982. "The Effect of Liquor Taxes on Heavy Drinking," Bell Journal of Economics, The RAND Corporation, vol. 13(2), pages 379-390, Autumn. [Downloadable!] (restricted)
  4. Heckman, James J, 1979. "Sample Selection Bias as a Specification Error," Econometrica, Econometric Society, vol. 47(1), pages 153-61, January. [Downloadable!] (restricted)
  5. Grossman, Michael, 1972. "On the Concept of Health Capital and the Demand for Health," Journal of Political Economy, University of Chicago Press, vol. 80(2), pages 223-55, March-Apr. [Downloadable!] (restricted)
  6. Wooldridge, Jeffrey M, 1992. "Some Alternatives to the Box-Cox Regression Model," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 33(4), pages 935-55, November. [Downloadable!] (restricted)
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  7. Duan, Naihua, et al, 1983. "A Comparison of Alternative Models for the Demand for Medical Care," Journal of Business & Economic Statistics, American Statistical Association, vol. 1(2), pages 115-26, April.
  8. John Mullahy, 1997. "Instrumental-Variable Estimation Of Count Data Models: Applications To Models Of Cigarette Smoking Behavior," The Review of Economics and Statistics, MIT Press, vol. 79(4), pages 586-593, November. [Downloadable!] (restricted)
  9. Dranove, David, 1988. "Demand Inducement and the Physician/Patient Relationship," Economic Inquiry, Oxford University Press, vol. 26(2), pages 281-98, April.
  10. Lewit, Eugene M & Coate, Douglas & Grossman, Michael, 1981. "The Effects of Government Regulation on Teenage Smoking," Journal of Law & Economics, University of Chicago Press, vol. 24(3), pages 545-69, December.
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  11. Ruhm, Christopher J., 1996. "Alcohol policies and highway vehicle fatalities," Journal of Health Economics, Elsevier, vol. 15(4), pages 435-454, August. [Downloadable!] (restricted)
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  12. Kenkel, Donald S, 1996. "New Estimates of the Optimal Tax on Alcohol," Economic Inquiry, Oxford University Press, vol. 34(2), pages 296-319, April.
  13. Heckman, James J, 1978. "Dummy Endogenous Variables in a Simultaneous Equation System," Econometrica, Econometric Society, vol. 46(4), pages 931-59, July. [Downloadable!] (restricted)
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  14. Mullahy, John, 1998. "Much ado about two: reconsidering retransformation and the two-part model in health econometrics," Journal of Health Economics, Elsevier, vol. 17(3), pages 247-281, June. [Downloadable!] (restricted)
  15. William H. Greene, 1994. "Accounting for Excess Zeros and Sample Selection in Poisson and Negative Binomial Regression Models," Working Papers 94-10, New York University, Leonard N. Stern School of Business, Department of Economics.
  16. Mullahy, John, 1986. "Specification and testing of some modified count data models," Journal of Econometrics, Elsevier, vol. 33(3), pages 341-365, December. [Downloadable!] (restricted)
  17. Kenkel, Don, 1990. "Consumer Health Information and the Demand for Medical Care," The Review of Economics and Statistics, MIT Press, vol. 72(4), pages 587-95, November. [Downloadable!] (restricted)
  18. Viscusi, W Kip, 1990. "Do Smokers Underestimate Risks?," Journal of Political Economy, University of Chicago Press, vol. 98(6), pages 1253-69, December. [Downloadable!] (restricted)
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  20. James Tobin, 1956. "Estimation of Relationships for Limited Dependent Variables," Cowles Foundation Discussion Papers 3R, Cowles Foundation, Yale University. [Downloadable!]
  21. Terza, Joseph V., 1998. "Estimating count data models with endogenous switching: Sample selection and endogenous treatment effects," Journal of Econometrics, Elsevier, vol. 84(1), pages 129-154, May. [Downloadable!] (restricted)
  22. Ippolito, Pauline M & Mathios, Alan D, 1995. "Information and Advertising: The Case of Fat Consumption in the United States," American Economic Review, American Economic Association, vol. 85(2), pages 91-95, May. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Fabrice Etilé, 2006. "Who does the hat fit? Teenager heterogeneity and the effectiveness of information policies in preventing cannabis use and heavy drinking," Health Economics, John Wiley & Sons, Ltd., vol. 15(7), pages 697-718. [Downloadable!]
  2. Alfonso Miranda & Sophia Rabe-Hesketh, 2005. "Maximum Likelihood Estimation of Endogenous Switching And Sample Selection Models for Binary, Count, And Ordinal Variables," Keele Economics Research Papers KERP 2005/14, Centre for Economic Research, Keele University. [Downloadable!]
  3. Stephen Pudney, 2004. "Keeping off the grass? An econometric model of cannabis consumption in Britain," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 19(4), pages 435-453. [Downloadable!]
  4. Andr? Romeu-Santana & ?gel M. Vera-Hern?dez, . "A Semi-Nonparametric Estimator For Counts With An Endogenous Dummy. Variable," UFAE and IAE Working Papers 452.00, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC). [Downloadable!]
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  5. Stephen Pudney, 2001. "Keeping off the Grass? An Econometric Model of Cannabis Consumption by Young People in Britain," Discussion Papers in Economics 02/9, Department of Economics, University of Leicester, revised Mar 2002. [Downloadable!]
  6. Joseph V. Terza & Donald S. Kenkel & Tsui-Fang Lin & Shinichi Sakata, 2008. "Care-giver advice as a preventive measure for drinking during pregnancy: zeros, categorical outcome responses, and endogeneity," Health Economics, John Wiley & Sons, Ltd., vol. 17(1), pages 41-54. [Downloadable!]
  7. William E. Becker & William H. Greene, 2001. "Teaching Statistics and Econometrics to Undergraduates," Journal of Economic Perspectives, American Economic Association, vol. 15(4), pages 169-182, Fall. [Downloadable!] (restricted)
  8. Alfonso Miranda & Massimiliano Bratti, 2006. "Non-Pecuniary Returns to Higher Education:," IZA Discussion Papers 2090, Institute for the Study of Labor (IZA). [Downloadable!]
  9. Andrés Romeu & Marcos Vera-Hernández, 2004. "Counts With An Endogenous Binary Regressor: A Series Expansion Approach," Working Papers. Serie AD 2004-36, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie). [Downloadable!]
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