State and self investments in health
AbstractWe consider how individuals' decisions on their health behaviours depend on the level of investment in their health provided by the State. We develop the model provided by Ehrlich and Becker (1972) and Peltzman (1975) and we show that higher levels of protection provided by the State (either through the increased availability or effectiveness of medical care) can crowd out or reinforce self-insurance. We apply this model to the smoking cessation decision made by individuals diagnosed with a cardiovascular disease in waves of the Health Survey of England between 1993 and 2006. There has been a considerable increase in the proportion of these individuals who receive prescriptions of statins from the State, a highly effective drug that reduces the probability of further heart attacks and premature death. We nd that the probability of quitting smoking is increased by four percentage points amongst those individuals prescribed statins. This result is robust to allowing for the direct effects of smoking advice. When the potential endogeneity of doctors' decision to prescribe statins is dealt with using variables in national guidelines, we find that unobservable characteristics which make people more prone to stop smoking reduce the probability of receiving statins and the evidence of the complementarity between quitting smoking and prescription of statins is confirmed.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by HEDG, c/o Department of Economics, University of York in its series Health, Econometrics and Data Group (HEDG) Working Papers with number 10/23.
Date of creation: Sep 2010
Date of revision:
Contact details of provider:
Postal: HEDG/HERC, Department of Economics and Related Studies, University of York, York, YO10 5DD, United Kingdom
Phone: (0)1904 323776
Fax: (0)1904 323759
Web page: http://www.york.ac.uk/economics/postgrad/herc/hedg/
More information through EDIRC
Crowding-out; moral hazard; preventative behaviour; drugs;
Other versions of this item:
- C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions
- C35 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions
- D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
- I12 - Health, Education, and Welfare - - Health - - - Health Production
- I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
This paper has been announced in the following NEP Reports:
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.:
- Scott, Anthony & Shiell, Alan & King, Madeleine, 1996. "Is general practitioner decision making associated with patient socio-economic status?," Social Science & Medicine, Elsevier, vol. 42(1), pages 35-46, January.
- Christophe Courbage & Augustin de Coulon, 2004. "Prevention and Private Health Insurance in the U.K," The Geneva Papers on Risk and Insurance, The International Association for the Study of Insurance Economics, vol. 29(4), pages 719-727, October.
- Peltzman, Sam, 1975. "The Effects of Automobile Safety Regulation," Journal of Political Economy, University of Chicago Press, vol. 83(4), pages 677-725, August.
- S. Balia & AM. Jones, 2004.
"Mortality, Lifestyle and Socio-Economic Status,"
Working Paper CRENoS
200416, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.
- Silvia Balia & Andrew M Jones, 2005. "Mortality, lifestyle and socio-economic status," Health, Econometrics and Data Group (HEDG) Working Papers 05/02, HEDG, c/o Department of Economics, University of York.
- Christophe Courbage & Augustin de Coulon, 2004. "Prevention and Private Health Insurance in the U.K," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan, vol. 29(4), pages 719-727, October.
- Takeshi Amemiya, 1975. "Qualitative Response Models," NBER Chapters, in: Annals of Economic and Social Measurement, Volume 4, number 3, pages 363-372 National Bureau of Economic Research, Inc.
- Contoyannis, Paul & Jones, Andrew M., 2004.
"Socio-economic status, health and lifestyle,"
Journal of Health Economics,
Elsevier, vol. 23(5), pages 965-995, September.
- Goddard, Maria & Smith, Peter, 2001. "Equity of access to health care services: : Theory and evidence from the UK," Social Science & Medicine, Elsevier, vol. 53(9), pages 1149-1162, November.
- David Roodman, 2009. "Estimating Fully Observed Recursive Mixed-Process Models with cmp," Working Papers 168, Center for Global Development.
- 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.
- Laure B. de Preux, 2011. "Anticipatory ex ante moral hazard and the effect of medicare on prevention," Health Economics, John Wiley & Sons, Ltd., vol. 20(9), pages 1056-1072, 09.
- Jones, Andrew M., 1994. "Health, addiction, social interaction and the decision to quit smoking," Journal of Health Economics, Elsevier, vol. 13(1), pages 93-110, March.
- Vassilis A. Hajivassiliou & Daniel L. McFadden, 1993.
"The Method of Simulated Scores for the Estimation of LDV Models,"
_023, Yale University.
- Vassilis A. Hajivassiliou & Daniel L. McFadden, 1998. "The Method of Simulated Scores for the Estimation of LDV Models," Econometrica, Econometric Society, vol. 66(4), pages 863-896, July.
- V A Hajivassiliou & DL McFadden, 1997. "The Method of Simulated Scores for the Estimation of LDV Models," STICERD - Econometrics Paper Series /1997/328, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.
- Maddala,G. S., 1986. "Limited-Dependent and Qualitative Variables in Econometrics," Cambridge Books, Cambridge University Press, number 9780521338257, April.
- Ehrlich, Isaac & Becker, Gary S, 1972. "Market Insurance, Self-Insurance, and Self-Protection," Journal of Political Economy, University of Chicago Press, vol. 80(4), pages 623-48, July-Aug..
- de Preux, L, 2010. "Ex Ante Moral Hazard and Anticipatory Behaviour: Some Evidence," Health, Econometrics and Data Group (HEDG) Working Papers 10/13, HEDG, c/o Department of Economics, University of York.
- Wilde, Joachim, 2000. "Identification of multiple equation probit models with endogenous dummy regressors," Economics Letters, Elsevier, vol. 69(3), pages 309-312, December.
- G. S. Maddala & Lung-Fei Lee, 1976. "Recursive Models with Qualitative Endogenous Variables," NBER Chapters, in: Annals of Economic and Social Measurement, Volume 5, number 4, pages 525-545 National Bureau of Economic Research, Inc.
- Mullahy, John, 2011. "Marginal Effects in Multivariate Probit and Kindred Discrete and Count Outcome Models," Working Papers 201135, Geary Institute, University College Dublin.
- 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.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Jane Rawlings).
If references are entirely missing, you can add them using this form.