IDEAS home Printed from https://ideas.repec.org/p/osf/socarx/vh2qa.html
   My bibliography  Save this paper

The Spending Responses to Adverse Health Shocks: Evidence from a Panel of Colombian Households

Author

Listed:
  • Cortes, Darwin
  • Gallegos, Andrés
  • Perez Perez, Jorge

Abstract

We analyze the effect of adverse health shocks on households' different expenditure shares using a difference in differences approach. We find that households engage in substitution between health and food spending in response to the negative health shocks. We find substantial heterogeneity in this trade-off between current and future health mediated by access to social protection, job contract type, and location (urban-rural). Households from rural areas, with heads holding informal jobs, and without access to safety nets, are more vulnerable than others. We discuss several policy implications.

Suggested Citation

  • Cortes, Darwin & Gallegos, Andrés & Perez Perez, Jorge, 2021. "The Spending Responses to Adverse Health Shocks: Evidence from a Panel of Colombian Households," SocArXiv vh2qa, Center for Open Science.
    • Handle: RePEc:osf:socarx:vh2qa
    DOI: 10.31219/osf.io/vh2qa
    as

    Download full text from publisher

    File URL: https://osf.io/download/60059c3be80d3707baa570ee/
    Download Restriction: no
    File URL: https://libkey.io/10.31219/osf.io/vh2qa?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Hainmueller, Jens, 2012. "Entropy Balancing for Causal Effects: A Multivariate Reweighting Method to Produce Balanced Samples in Observational Studies," Political Analysis, Cambridge University Press, vol. 20(1), pages 25-46, January.
    2. Rodrigo Barros, 2008. "Wealthier But Not Much Healthier: Effects of a Health Insurance Program for the Poor in Mexico," Discussion Papers 09-002, Stanford Institute for Economic Policy Research.
    3. Pollak, Robert A & Wales, Terence J, 1981. "Demographic Variables in Demand Analysis," Econometrica, Econometric Society, vol. 49(6), pages 1533-1551, November.
    4. Sebastien Lecocq & Jean-Marc Robin, 2015. "Estimating almost-ideal demand systems with endogenous regressors," Stata Journal, StataCorp LLC, vol. 15(2), pages 554-573, June.
    5. Paul Gertler & Jonathan Gruber, 2002. "Insuring Consumption Against Illness," American Economic Review, American Economic Association, vol. 92(1), pages 51-70, March.
    6. Robert Sparrow & Ellen Van de Poel & Gracia Hadiwidjaja & Athia Yumna & Nila Warda & Asep Suryahadi, 2014. "Coping With The Economic Consequences Of Ill Health In Indonesia," Health Economics, John Wiley & Sons, Ltd., vol. 23(6), pages 719-728, June.
    7. Peter Ganong & Pascal Noel, 2019. "Consumer Spending during Unemployment: Positive and Normative Implications," American Economic Review, American Economic Association, vol. 109(7), pages 2383-2424, July.
    8. Arthur Lewbel & Krishna Pendakur, 2009. "Tricks with Hicks: The EASI Demand System," American Economic Review, American Economic Association, vol. 99(3), pages 827-863, June.
    9. Richard Blundell & Margherita Borella & Jeanne Commault & Mariacristina De Nardi, 2024. "Old Age Risks, Consumption, and Insurance," American Economic Review, American Economic Association, vol. 114(2), pages 575-613, February.
    10. Hut, Stefan & Oster, Emily, 2022. "Changes in household diet: Determinants and predictability," Journal of Public Economics, Elsevier, vol. 208(C).
    11. Barnett, William A. & Serletis, Apostolos, 2008. "Consumer preferences and demand systems," Journal of Econometrics, Elsevier, vol. 147(2), pages 210-224, December.
    12. Barnett, William A. & Serletis, Apostolos, 2008. "Measuring Consumer Preferences and Estimating Demand Systems," MPRA Paper 12318, University Library of Munich, Germany.
    13. Laura H. Atuesta & Dusan Paredes Araya, 2012. "A spatial cost of living index for Colombia using a microeconomic approach and censored data," Applied Economics Letters, Taylor & Francis Journals, vol. 19(18), pages 1799-1805, December.
    14. Paul Gertler & David I. Levine & Enrico Moretti, 2009. "Do microfinance programs help families insure consumption against illness?," Health Economics, John Wiley & Sons, Ltd., vol. 18(3), pages 257-273, March.
    15. Hut, Stefan, 2020. "Determinants of Dietary Choice in the US: Evidence from Consumer Migration," Journal of Health Economics, Elsevier, vol. 72(C).
    16. Deaton,Angus & Muellbauer,John, 1980. "Economics and Consumer Behavior," Cambridge Books, Cambridge University Press, number 9780521296762, June.
    17. Ana María Iregui & Jesús Otero, 2017. "Testing for spatial market integration: evidence for Colombia using a pairwise approach," Agricultural Economics, International Association of Agricultural Economists, vol. 48(6), pages 743-753, November.
    18. Gary Solon & Steven J. Haider & Jeffrey M. Wooldridge, 2015. "What Are We Weighting For?," Journal of Human Resources, University of Wisconsin Press, vol. 50(2), pages 301-316.
    19. Joseph Kofi Acquah & Roshani Dahal, 2018. "ROSCAs as Lenders of Last Resort after Financial Crises: Lessons from Indonesia," Journal of International Development, John Wiley & Sons, Ltd., vol. 30(7), pages 1223-1239, October.
    20. Attanasio, Orazio P. & Szekely, Miguel, 2004. "Wage shocks and consumption variability in Mexico during the 1990s," Journal of Development Economics, Elsevier, vol. 73(1), pages 1-25, February.
    21. James Banks & Richard Blundell & Arthur Lewbel, 1997. "Quadratic Engel Curves And Consumer Demand," The Review of Economics and Statistics, MIT Press, vol. 79(4), pages 527-539, November.
    22. Wagstaff, Adam, 2007. "The economic consequences of health shocks: Evidence from Vietnam," Journal of Health Economics, Elsevier, vol. 26(1), pages 82-100, January.
    23. Maria Eugenia Genoni, 2012. "Health Shocks and Consumption Smoothing: Evidence from Indonesia," Economic Development and Cultural Change, University of Chicago Press, vol. 60(3), pages 475-506.
    24. , 2020. "Why Does Consumption Fluctuate in Old Age and How Should the Government Insure it?," Opportunity and Inclusive Growth Institute Working Papers 40, Federal Reserve Bank of Minneapolis.
    25. Erich Battistin, 2002. "Errors in Survey Reports of Consumption Expenditures," 10th International Conference on Panel Data, Berlin, July 5-6, 2002 C4-2, International Conferences on Panel Data.
    26. Ho, Daniel E. & Imai, Kosuke & King, Gary & Stuart, Elizabeth A., 2007. "Matching as Nonparametric Preprocessing for Reducing Model Dependence in Parametric Causal Inference," Political Analysis, Cambridge University Press, vol. 15(3), pages 199-236, July.
    27. Elena Lasarte Navamuel & Dusan Paredes & Esteban Fernández Vázquez, 2012. "A true cost of living index for Spain using a microeconomic approach and censored data," Documentos de Trabajo en Economia y Ciencia Regional 26, Universidad Catolica del Norte, Chile, Department of Economics, revised Aug 2012.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Cano, Alexander & Cortes, Darwin & Mantilla, Cesar & Prada-Medina, Laura & Restrepo, Medardo, 2022. "The trade-off between liquidity and insurance: voucher payments in a lab-in-the-field experiment with Colombian rural workers," OSF Preprints 8ft4e, Center for Open Science.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Cortes, D & Gallegos-Vargas, A & Perez, J, 2023. "Expenditure Responses to Adverse Health Shocks: Evidence from a Panel of Colombian Households," Documentos de Trabajo 20787, Universidad del Rosario.
    2. Neelsen, Sven & Limwattananon, Supon & O'Donnell, Owen & van Doorslaer, Eddy, 2019. "Universal health coverage: A (social insurance) job half done?," World Development, Elsevier, vol. 113(C), pages 246-258.
    3. Abhishek Dureja & Digvijay S. Negi, 2022. "Coping with the consequences of short‐term illness shocks: The role of intra‐household labor substitution," Health Economics, John Wiley & Sons, Ltd., vol. 31(7), pages 1402-1422, July.
    4. Arjun S. Bedi & Sparrow, R.A., 2014. "Sickness and death," ISS Working Papers - General Series 51366, International Institute of Social Studies of Erasmus University Rotterdam (ISS), The Hague.
    5. Kalyan Kolukuluri, 2023. "Adverse health shocks, social insurance and household consumption: evidence from Indonesia’s Askeskin program," International Journal of Health Economics and Management, Springer, vol. 23(2), pages 213-235, June.
    6. Shojaeddini, Ensieh & Schreiber, Andrew & Wolverton, Ann & Marten, Alex, 2024. "Consumer demand and the economy-wide costs of regulation: Modeling households with empirically estimated flexible functional forms," Journal of Environmental Economics and Management, Elsevier, vol. 125(C).
    7. Owen (O.A.) O'Donnell, 2019. "Financial Protection Against Medical Expense," Tinbergen Institute Discussion Papers 19-010/V, Tinbergen Institute.
    8. Dalton, Michael & LaFave, Daniel, 2017. "Mitigating the consequences of a health condition: The role of intra- and interhousehold assistance," Journal of Health Economics, Elsevier, vol. 53(C), pages 38-52.
    9. Khan, Farid & Bedi, Arjun S. & Sparrow, Robert, 2015. "Sickness and Death: Economic Consequences and Coping Strategies of the Urban Poor in Bangladesh," World Development, Elsevier, vol. 72(C), pages 255-266.
    10. Barnett, William A. & Serletis, Apostolos, 2008. "Consumer preferences and demand systems," Journal of Econometrics, Elsevier, vol. 147(2), pages 210-224, December.
    11. Basco, Sergi & Domènech, Jordi & Rosés, Joan R., 2021. "The redistributive effects of pandemics: Evidence on the Spanish flu," World Development, Elsevier, vol. 141(C).
    12. Schulte, Isabella & Heindl, Peter, 2017. "Price and income elasticities of residential energy demand in Germany," Energy Policy, Elsevier, vol. 102(C), pages 512-528.
    13. Tianxin Pan & Michael Palmer & Ajay Mahal & Peter Annear & Barbara McPake, 2020. "The long‐run effects of noncommunicable disease shocks," Health Economics, John Wiley & Sons, Ltd., vol. 29(12), pages 1549-1565, December.
    14. Li, Shaoting & Chen, Xuan & Ren, Yanjun & Glauben, Thomas, 2024. "The impact of demographic dynamics on food consumption and its environmental outcomes: Evidence from China," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 23(2), pages 414-429.
    15. Korir, Lilian & Rizov, Marian & Ruto, Eric, 2020. "Food security in Kenya: Insights from a household food demand model," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 92, pages 99-108.
    16. Paris, Quirino & Caracciolo, Francesco, 2014. "Testing the Adding Up Condition in Demand Systems," Working Papers 171748, University of California, Davis, Department of Agricultural and Resource Economics.
    17. Apostolos Serletis & Maksim Isakin, 2017. "Stochastic volatility demand systems," Econometric Reviews, Taylor & Francis Journals, vol. 36(10), pages 1111-1122, November.
    18. Sven Neelsen & Supon Limwattananon & Owen O'Donnell & Eddy van Doorslaer, 2015. "Economic Impact of Illness with Health Insurance but without Income Insurance," Tinbergen Institute Discussion Papers 15-060/V, Tinbergen Institute.
    19. Yonatan Dinku & David Fielding & Murat Genç, 2018. "Health shocks and child time allocation decisions by households: evidence from Ethiopia," IZA Journal of Labor Economics, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 7(1), pages 1-23, December.
    20. James W. Mjelde & Kannika Duangnate, 2023. "Overview of Committed Quantities in Commodity Demand Analysis with a Focus on Energy," Energies, MDPI, vol. 16(11), pages 1-17, May.

    More about this item

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • I15 - Health, Education, and Welfare - - Health - - - Health and Economic Development
    • J46 - Labor and Demographic Economics - - Particular Labor Markets - - - Informal Labor Market

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:osf:socarx:vh2qa. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: OSF (email available below). General contact details of provider: https://arabixiv.org .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.