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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.

Suggested Citation

  • Fichera, Eleonora & Sutton, Matt, 2011. "State and self investments in health," Journal of Health Economics, Elsevier, vol. 30(6), pages 1164-1173.
  • Handle: RePEc:eee:jhecon:v:30:y:2011:i:6:p:1164-1173 DOI: 10.1016/j.jhealeco.2011.09.002
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    Citations

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    Cited by:

    1. Fichera, Eleonora & Emsley, Richard & Sutton, Matt, 2016. "Is treatment “intensity” associated with healthier lifestyle choices? An application of the dose response function," Economics & Human Biology, Elsevier, vol. 23(C), pages 149-163.
    2. 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.
    3. Paul Andres Rodriguez-Lesmes, 2017. "Early diagnosis of chronic conditions and lifestyle modification," DOCUMENTOS DE TRABAJO 015639, UNIVERSIDAD DEL ROSARIO.
    4. Eleonora Fichera & James Banks & Matt Sutton, 2014. "Health behaviours and the patient-doctor interaction: The double moral hazard problem," The School of Economics Discussion Paper Series 1415, Economics, The University of Manchester.
    5. Fichera, Eleonora & Banks, James & Siciliani, Luigi & Sutton, Matt, 2017. "Does Patient Health Behaviour respond to Doctor’s Effort?," Department of Economics Working Papers 58124, University of Bath, Department of Economics.
    6. Mullahy, John, 2011. "Marginal Effects in Multivariate Probit and Kindred Discrete and Count Outcome Models," Working Papers 201135, Geary Institute, University College Dublin.
    7. Fichera, Eleonora & Gray, Ewan & Sutton, Matt, 2016. "How do individuals’ health behaviours respond to an increase in the supply of health care? Evidence from a natural experiment," Social Science & Medicine, Elsevier, vol. 159(C), pages 170-179.
    8. Giovanni Bruno & Orietta Dessy, 2014. "Average partial effects in multivariate probit models with latent heterogeneity: Monte Carlo experiments and an application to immigrants' ethnic identity and economic performance," Italian Stata Users' Group Meetings 2014 10, Stata Users Group.

    More about this item

    Keywords

    Crowding-out; Preventative behaviour; Drugs prescription;

    JEL classification:

    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities
    • 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 Behavior
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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