健康經(jīng)濟學（巴塔查里亞）PPT全套教學課件

CHAPTER1

WHYHEALTHECONOMICS?Whyishealtheconomicsinteresting?TheU.S.healthcareeconomyismassiveandexpensive.Healthisamajorsourceofuncertaintyandrisk.Governmentsaroundtheworldaredeeplyinvolvedinfinancinghealthsystems.TheU.S.healthcareeconomyismassiveandexpensiveTheU.S.GDPin2008wasapproximately$14trillion.OneoutofeverysixdollarsspentintheU.S.thatyearwasspentonhealthcare.In1960,barelyonedollaroutofeverytwentyspentintheU.S.wenttowardhealthcare.Thetrendhasbeensimilarincountriesaroundtheworld,butnocountryspendsquiteasmuchonhealthcareastheU.S.Whatdowegetforallthismoney?HealthcareexpendituresintheUSHealthisuncertainandcontagiousThehealtheconomymaybehuge,buthowisitdifferentfromother,smallermarketslikethemarketforbananasandthemarketfortelevisions?TwointerestingeconomicpropertiesUncertainty:mostpeoplecanpredicthowmanybananasorTVstheywillbuyinthenextweek,butnothowmanyemergencyheartsurgeriestheywillneedinthenextweek.Contagiousness:itdoesn’tmattertoyouifyourneighborbuysabananaoraTV,butitdoesmatterifheskipshisflushot.UncertaintyandinsuranceAnunforeseenbrokenlegorheartattackcansuddenlycreatedemandforexpensivehealthcareservices.Becausemostpeopleareriskaverse,health-relateduncertaintymotivatesindividualstodemandhealthinsurance.Thisinturncreatesproblemsthatariseininsurancemarkets:adverseselectionandmoralhazard.Thesetwophenomenaarewhatmakehealthpolicyreallydifficult(andreallyinteresting).ContagiousnessandexternalitiesThefactthatotherpeople’shealthdecisionsaffectyoucreatesexternalitiesExamples:VaccinationsandotherpreventativemeasurescreatepositiveexternalitiesGoingoutinpublicwithEbolaviruscreatesnegativeexternalitiesExternalitiesunderminetheefficientfunctionofmarketsandoftenrequiregovernmentintervention.Healtheconomics=publicfinanceGovernmentsplayahugeroleinhealthmarketsbecauseofthefeaturesjustdiscussed.IncountriesliketheUnitedKingdom,Sweden,andCanada,thegovernmentisresponsibleforthevastmajorityofhealthcareexpenditures.EvenintheUS,withitsprivatehealthcaresystem,thegovernmentisresponsibleforhalfofallhealthcarespending.Healthcareisonlygettingbiggerandmoreexpensiveforgovernmentsandtaxpayers

Increasinglifeexpectanciesandgrayingpopulationsthroughoutthedevelopedworldwillplacestressonpublichealthinsurancesystems.Governmentswillhavetocopewithongoingquestionsaboutwhethertopayforexpensivenewmedicaltechnologies.Giventhesetrendswecanconfidentlyexpecthealthcaretobeanever-growinglineitemongovernmentbalancesheets.PositivevsnormativequestionsNormativequestionsDoeseveryonedeserveaccesstohealthcare,eveniftheycannotpay?Shouldpeoplebecompelledtopurchaseinsurance?Whenisitethicaltodenycaretoadyingpatient?Shouldthegovernmentbancertainunhealthyfoods?PositivequestionsHowmuchwoulditcosttoprovidefreecheckupsanddrugsforeveryoneinapopulation?Dostrictpatentprotectionsfornewdrugsspurinnovation?Howmuchwouldconsumerssaveifdoctorswerenotrequiredtohavemedicaldegreesormedicallicenses?Wouldataxonsaturatedfatmakeanationhealthier?Economicreasoningcannotanswernormativequestions,butitcananswerpositivequestions,andthatcanhelpusformopinionsaboutnormativequestions.TheuniqueUShealthcaremarketIntheU.S.,patientssometimespayoutofpocketforroutinehealthcare,likeflushotsandhealthcheckups.Inmanyothercountries,includingCanadaandtheUnitedKingdom,patientsalmostneverpayoutofpocketwhentheyreceivebasichealthcare.IntheU.S.,somepeoplearenoteligibleforgovernmentinsuranceandcannotafford(ordonotwant)tobuyprivateinsurance.Inalmostalldevelopedcountries,uninsuranceisextremelyrareorevennonexistent.Insuranceiseitherprovidedforfreebythegovernment,orprovidedbyamixofpublicandprivateinsurers.TheuniqueUShealthcaremarketEventhoughtheUSmarketisuniqueinthisway,muchofourempiricalevidencewillcomefromtheUS.Thisallowsustounderstandthemaladiesthatcanoccurinprivatemarketsforhealthcare:adverseselection,moralhazard,andmonopolisticfirms.Understandingtheseproblemsiscriticaltounderstandingwhyothercountriesapproachhealthpolicyinradicallydifferentways.CHAPTER2

DEMANDFORHEALTHCAREStandardeconomicdemandcurvesaredownwardslopingAsprice(P)decreases,quantity(Q)demandedincreasesExample:P=$3,Q=4lollipopsP=$1,Q=8lollipopsP=$0.50,Q=9lollipopsElasticitymeasuresthedegreeofdownward-slopingElasticdemandDE

pricesensitive:changesinpricegreatlyaffectthequantitydemandedInelasticdemandDIPriceinsensitive:changesinpricedonotsignificantlychangethequantitydemandedDoesthedemandcurveforhealthcareslopedownward?Arepeoplesensitivetothepriceofhealthcare?Isdemandforvaccinessuchthat…P=$100,Q=1,000P=$1,Q=1,000i.e.demandisinelastic?Isdemandforband-aidssuchthat…P=$100,Q=1P=$1,Q=30i.e.demandiselastic?Ifpeoplealwaysobeytheirdoctors,thendemandshouldbeinelastic!NeedrandomizedexperimentsRandomizedexperiments:Definition:astudythatassignstreatmentsrandomlytodifferentgroupsofstudyparticipantsIncludes:Acontrolgroup(notreatment)PlacebogroupHelpsgenerateexperimentalgroupsthatarestatisticallysimilartoeachotherNon-randomizedexperimentscanbebiasedMeasureddemandcurveDMisbiasedcomparedtotruedemandDTPeoplegenerallychoosetheamountofinsurancetheyreceiveSickerpeoplewillchoosemoreinsurancebecausetheyknowtheywillneedmorecareEvidencefromRandomizedExperimentsTwoRandomizedExperimentsRANDHealthInsuranceExperiment(HIE)OregonMedicaidExperimentRANDHIERandomlyassigned2,000familiesfromsixUScitiestodifferentinsurancecoverageplansCopaymentsgroups:Free,25%,50%,and95%Trackedutilizationofhealthcare(Q)ineachcopaymentplan(P)CopaymentactsasthemarginalcostthateachfamilyfaceswhenbuyingcareOregonMedicaidExperimentComparedtwogroupsoflow-incomeadultsMedicaidlotterywinnersvs.lotterylosersLotterywinnersgottoapplyforpublichealthinsurancethroughMedicaidSotheyfacedlowerout-of-pocketpricesforcareLotteryloserscouldnotgetMedicaid(butmighthavepurchasedoutsideinsurance)Results?Healthcaredemandcurvesaredownwardsloping(economictheoryprevails!)PricechangesaffecteddemandforhealthcareDifferentmeasuresofcareOutpatientCareDef:

anymedicalcarethatdoesnotinvolveanovernighthospitalstayE.g.runnynoses,twistedankles,minorbrokenbonesInpatientCareDef:medicalcarerequiringovernightstaysE.g.MoreserioussurgeriesorconditionsthatrequireovernightrecoveryormonitoringERCareDef:careinvolvingtheemergencyroomE.g.heartattacks,strokesOutpatientcareRANDHIEAspatientcost-sharing(P)increases,numberofepisodes(Q)ofoutpatientcaredecreasesHoldsforbothacuteandchronicconditionsDatafromKeeleretal.(1988)OutpatientcareOregonMedicaidStudyLotterywinnershavemoreoutpatientvisitsthanlotterylosersBoththeRANDHIEandtheOregonMedicaidStudyfinddownward-slopingdemandforoutpatientcare!InpatientcareRANDHIEOregonMedicaidStudyNosignificantdifferenceinusageratesbetweenlotterywinnersandlotterylosersDemandisstilldownward-slopingbutlesselasticthandemandforoutpatientcare(DatafromKeeler,1988)ERcareRANDHIEOregonMedicaidStudyNosignificantdifferenceinERcareforlotterywinnersvs.lotterylosersEvenforemergencyroomcare–likelythemosturgentkind–thoseonthehighestcopaymentplanintheRANDHIEwerelesslikelytobuycare!(DatafromNewhouse,1993)PediatriccarePediatriccareDef:careforinfantsorchildrenusuallypaidforbyaparentorguardianDatafromRANDHIE:Mentalhealth&dentalCare(RANDHIE)PrescriptiondrugsDatafromRANDHIENon-randomizedexperimentevidenceU.S.MedicareCitizensareeligibleforhealthinsurancethroughMedicarewhentheyturn65butnotbeforeIfdemandforhealthcareisdownward-sloping,weexpectajumpinhealthcareusageatage65Thisisknownasadiscontinuity

studyThereisadiscontinuityinhealthinsuranceatage65Cardetal.(2009)Cardetal.havetwomainfindings:Unplannedemergencydepartmentadmissionsfollowalineartrendaroundtheageof65Otherhospitaladmissionsjumpupattheageof65ThereisadiscontinuityinmedicalusageatthesamepointofdiscontinuityinMedicarecoverage!ThisisfurtherevidencethatdemandforhealthcareissensitivetopriceComparingdemandcurvesHowcanwedeterminewhichtypeofdemandismorepricesensitive?DatafromKeeleretal.(1988)ArcElasticityNeedameasuretocomparetherelativepricesensitivityofdifferentgoodsSothemeasureneedstobeunitless(howelsewouldwecompareERvisitstosticksofgum?)ArcElasticity:HealthcarehasinelasticdemandDoespriceforcareaffecthealth?MortalityratesRAND

HIE:nodifferencebetweentreatmentgroups**10%differenceofmortalityratebetweenhigh-riskparticipantsonfreeandcost-sharingplans(peopleonfreeplanlesslikelytodie)OregonMedicaid:nodifferencebetweenlotterywinnersandlosersDoesthepriceofcareaffecthealth?Doespriceforcareaffecthealth?RANDHIE:Generally,nohealthdifferencesbetweenpeopleonfreeplanvs.cost-sharing! **Onlystatisticallysignificantdifferencebetweenplanswereinbloodpressure,myopia,&presbyopiaDoespriceforcareaffecthealth?OregonMedicaidExperiment Lotterywinnersself-reportedbetteroverallhealth,morehealthydays,andlowerratesofdepressionDiscrepancywithRANDHIEmaybebecauseOregonMedicaidStudyworkedwiththeverylow-income,whileRANDHIEstudiedabroadercross-sectionoftheU.S.ConclusionDemandcurvesforhealthcarearedownwardslopingQuantityofcaredemandedissensitivetoprice(thoughnotassensitiveasotherdemands,e.g.formovies)BUTgenerally,priceofhealthcaredoesnotseemtoaffectone’shealthExceptionisthatpriceseemstoaffectthemostvulnerablesegmentsofthepopulation(low-income,highbloodpressure,etc.)Policyandhealthinsuranceimplications?CHAPTER3

DEMANDFORHEALTH:

THEGROSSMANMODELIntroPreviously…DemandforhealthcareisdownwardslopingPeoplechooseamountofhealthcaretheyreceivebasedonpricePeoplechoosetheirhealthcare,butdotheychoosetheirownhealth?Ishealthsomethingthathappenstous?Ordowechooseit?WeusetheGrossmanmodeltoexplorethisquestionThe3RolesofHealth(H)HealthplaysthreerolesintheGrossmanmodel:AconsumptiongoodAninputintoproductionAformofstock/capital(aninvestment)HealthasaconsumptiongoodHealthasadirectinputintoutilityHealthasaconsumptiongoodentersdirectlyintoutilitySingle-periodUtilityattimet

Ut=U(Ht,Zt)Ht=levelofhealthZt=“homegood”Everythingnon-healththatcontributestoutilityE.g.videogames,timewithfriends,movietickets**Note:health≠healthcareHealthcareisnotexplicitlyintheutilityfunctioni.e.Gettingvaccinesdoesnotprovideutilitybutstayinghealthydoes

HealthasaconsumptiongoodTimeconstraintsintheGrossmanmodelInasingleperiod,thereareonly24hoursinadaytocontributetoyourutility:Θ=24=TW+TZ+TH+TSDividetotaltimeΘbetween:WorkingTWPlayingTZImprovinghealthTHBeingsickTSHealthasaconsumptiongoodTimeconstraintmeanstimetradeoffsTimeworkingTWproducesincomeBuythingsthatcontributetoutility(H,Z)butneedtospendtimeinthoseactivities(TH,TZ)TimesickTSdoesnotincreaseutilityEveryhourspentsicktakesawaytimetodootherutility-increasingactivities(losstime)HealthasaconsumptiongoodThelabor-leisuretradeoffGivenlevelsofTS

andTH,individualchooseshowtoallocatetimebetweenworkTWandplayTZ.OptimalpointdecidesonindifferencecurvesWhenhealthimproves,moreproductivetimeisavailableforusePushestimeconstraintoutward(fromU0toU1)CanreachhigherutilitiesHealthasaconsumptiongoodHealthasaninputintoproductionThethreerolesofhealth(H)HealthplaysthreerolesintheGrossmanmodel:AconsumptiongoodAninputintoproductionOfhealth(H)Ofproductivetime(TP)Aformofstock/capital(aninvestment)ProducingHandZBothHealthandHomegoodZmustbeproducedwithtimeandmarketinputs

Ht=H(Ht-1,TtH,Mt) Zt=Z(TtZ,Jt)Mt=marketinputsforhealthHEx:weights,treadmillJt=marketinputsforhomegoodsZEx:videogames,operaticketsToday’shealthHt

alsodependsonyesterday’shealthHt-1Thisishealth’sthirdroleasastockwhichwediscusslaterHealthasaninputintoproductionHealthaffectsproductionbyloweringTSTP=Θ–TS=TW+TZ+THHealthieryouare,thelesstimeyouspendsickTPisproductivetimespentonusefulactivitiesIncreasedproductivetimecanbereinvestedintohealth(TH)orotherusefulendeavors(TW,TZ)Onlywaytoreducesicktime(TS)istoimprovehealthHealthasaninputintoproductionProductionPossibilityFrontierProductionPossibilityFrontier(PPF):the

possiblecombinationsofHandZattainable,givenanindividual’sbudgetandtimeconstraintsStandardeconomicPPFshowsHandZassubstitutesWrong!Why?MaximumZisminimumHIfindividualisatminimumH,theyaredeadandcannotproduceanyZHealthasaninputintoproductionAnINCORRECTPPFProblempointPPFintheGrossmanmodelPointAHmin:noproductivetimeforwork,play,orimprovementofhealthPointB“free-lunchzone”Smallimprovementsinhealthyieldlargeincreasesinproductivetime;canincreaseZwithoutgivingupHHealthasaninputintoproductionACORRECTPPFPPFintheGrossmanmodel

PointCMaximumZpossibleCan’timprovehealthwithouttakingawayZIftrytoincreaseZbyshiftingresources,sicktimewillincreaseandoutweighgaininresourcesforZIncreasesinhealthwillnotproduceextratimetooffsettimespentimprovinghealthHealthasaninputintoproductionACORRECTPPFPPFintheGrossmanmodelPointD“tradeoffzone”IncreasesinHonlyyieldsmalldecreasesinsicktimeIncreasesinH,takesawayfromZPointESpendalltimeandmoneyonhealthIgnoresallhomegoodsHealthasaninputintoproductionACORRECTPPFChoosingoptimalH*andZ*SomeonewhovaluesbothHandZchoosesapointbetweenCandEinordertomaximizetheirutilityChoosespointFU2isunattainablegivenPPFconstraintsAtU0,anindividualcanattainmoreutilityAtF:U1andPPFaretangentH*andZ*areoptimallevelsofhealthandhomegoodsHealthasaninputintoproductionExoticpreferencesandindifferencecurvesIfindividualonlycaresabouthomegoods(Z)HorizontalindifferencecurvesH*andZ*atpointCCaresonlyaboutHealthHCaresonlyabouthomegoodZHealthasaninputintoproductionIfindividualonlycaresaboutHealthVerticalindifferencecurvesH*andZ*atpointEHealthasaninvestmentThethreerolesofhealth(H)HealthplaysthreerolesintheGrossmanModel:AconsumptiongoodAninputintoproductionAformofstock/capital(aninvestment)LifetimeofutilityOnanyday,anindividualconsidersnotonlytoday’sutilityU(H0,Z0)butallfutureutilityaswell!

Healthisastock;someofitcarriesovereachnewperiodHomegoodZisaflow(itlastsforonly1period)δ=individual’sdiscountrateApersonvaluesutilitynowmorethaninthefutureΩ=individual’slifespan(totalnumberofperiods)HealthasaninvestmentHealthdepreciatesovertimeSomeofyesterday’shealthlaststotodaybutnotallofitHt=H((1-γ)Ht-1,TtH,Mt)γ=rateofdepreciationRecall:Ht=healthattimeperiodtHt-1=healthfrompreviousperiodTtH=timespentonhealthinperiodtMt=marketinputsforhealth(likecheckupsandprescriptionpills)HealthasaninvestmentMECcurveandinvestmentsinhealthMarginalEfficiencyofCapital(MEC)curve:indicateshowefficienteachunitofhealthcapitalisinincreasinglifetimeutilityWhenlevelofHislow,smallinvestmentshavehighreturnstoproductivetimeHealthasaninvestmentCoststoinvestinginhealthOpportunitycostForgoesputtingmoneyintootherinvestmentsr=interestrateofalternativemarketinvestmentDepreciationduetoaging(γ)Healthmustpayareturnofatleastr+γIfreturnislessthan r+γ,thenmarketreturnbeatshealthinvestmentreturnH*=optimalamountofhealthMarginalcostbalanceswithmarginalbenefitofhealthinvestmentHealthasaninvestmentPredictionsoftheGrossmanmodelTheGrossmanmodelhelpsexplainwhyweobserve:BetterhealthamongtheeducatedDeclininghealthamongtheagingHealthandeducationWell-educatedindividualsaremoreefficientproducersofhealthCollegegradsbenefitsmorethanahighschooldropout.Explanations?MECandefficiencyofhealthinvestmentBettereducatedaremoreefficientateachlevelofhealthinvestmentMECC>MECHH*CishigherthanH*HMECC=collegegraduateMECH=highschooldropoutPredictionsoftheGrossmanmodelTheGrossmanmodelhelpsexplainwhyweobserve:BetterhealthamongtheeducatedDeclininghealthamongtheagingDepreciationofhealthRecall: Ht=H((1-γ)Ht-1,TtH,Mt)DepreciationγisnotconstantγincreaseswithageAsγincreases,costs (r+γ)increaseandittakesmoreresourcestomaintainsamelevelofhealthAsaresultofincreasingdepreciationγ

overtime,optimalhealthH*alsodeclinesovertime!OptimaldeathintheGrossmanmodelBecauseofrisingdepreciation,therearebetterinvestmentsinthemarketthantheindividual’shealthH*eventuallyreachesHminWhywouldanyonechooseHmin?HowisHminutility-maximizing?ConclusionIshealthsomethingthathappenstousorischosen?GrossmanmodelsaysitischosenInfact,weevenchoosewhenwedieWhilethatmayseemfar-fetched,GrossmanmodelausefultoolforunderstandingtherolesandtradeoffsofhealthNextweusetheGrossmanmodeltounderstandempiricalfindingsabouttherelationshipbetweensocioeconomicstatusandhealthCHAPTER4

SOCIOECONOMICDISPARITIESINHEALTHIntroPreviously…GrossmanmodelIndividualsmakechoicesabouttheirhealthbasedontimeconstraints,budgetconstraints,andutilityOptimalamountofhealth(H*)changesbasedondecisionsabouttradeoffsHowdoessocioeconomicstatus(SES)affecthealthandchoicesabouthealth?DoeshealthdetermineSES?OrdoesSESdeterminehealth?UseempiricalevidencetoexplorethesequestionsThepervasivenessofhealthdisparitiesHealthdisparitiesareeverywhereHealthDisparity:(def)differencesinhealth--incidence,prevalence,mortality,andburdenofdisease--betweenspecificpopulationsex:deathratesforallcancertypesforbothmenandwomenarehighestamongAfricanAmericans1Ubiquitousworldwideacrossraces,educationalattainments,employmentgrades,andincomesBroadlyacrossallsocioeconomicstatuses(SES)HealthdisparitiesareeverywhereByeducation:Collegegraduatesare25%morelikelytosurvivetoage68thanhighschooldropoutsByrace:HispanicsreportbetterhealthstatusthanblackindividualsWhiteindividualsreportbetterhealththenbothHispanicandblackindividualsHealthdeteriorateswithageacrossallraces,butdisparitiespersistHealthdisparitiesacrossincomeGenerally:high-incomeindividualsself-reportahigherhealthstatusthanthoseoflowerincomesFormostconditions,thepoorexhibitmoreincidencesofdiseaseSomeexceptionslikeBronchitis--nodifferenceHayfever--therichappeartobediagnosedwithhayfevermoreoftenMaybeexplainableifricherchildrenvisitthedoctormoreoftenandhence,aremorelikelytobediagnosedDisparitiesevenwithuniversalinsuranceEvenincountrieswithuniversalhealthinsurance,healthdisparitiespersistCanada:Self-reportedhealthstatusforchildrenathighSESbetterthanchildrenoflowSES(CurrieandStabile2003)England:WediscusstheWhitehallstudieslaterTheoriestoexplainhealthdisparitiesWhydohealthdisparitiesexist?Reasons/theoriesEarlylifeeventsIncomelevelsStressofbeingpoorWorkcapacityImpatienceAdherencetomedicaladvicePolicyimportanceofunderstandingcausesofdisparitiesbeforeaddressingthemWhatcauseswhat?DoesbadhealthcauselowSES?DoeslowSEScausebadhealth?Arethereotherfactors?HypothesesforhealthdisparitiesEfficientproducerThriftyphenotypeDirectincomeAllostaticloadIncomeinequalityAccesstocareProductivetimeTimepreference(TheFuchshypothesis)TheGrossmanmodelandhealthdisparitiesRecallMECindicatesthereturnoneachadditionalunitofhealthcapitalDifferentSESgroupsmayhavedifferentMECsWhy?EachhypothesispositsadifferentreasonTheefficientproducerhypothesisHypothesis:better-educatedindividualsaremoreefficientproducersofhealththanlesswell-educatedindividualsGrossmanpredictsthatpeoplewhoaremoreefficienthealthproducerswillhavehigherH*Lleras-Muney(2005)findthatanadditionalyearofschoolingcaused~1.7yearincreaseinlifeexpectancyin1920sUSHence,educationimproveshealthTheefficientproducerhypothesisPossiblecausalmechanismsPossiblereasonsforpositivecorrelationbetweenhealthandeducation?LessonsinschoolhelpstudentstotakebettercareofthemselvesSchoolinghelpsstudentsbemorepatientwhenitcomestopayoffsofinvestments(likehealth)Better-educatedmorelikelytoadheretotreatmentregimensTheefficientproducerhypothesisThriftyphenotypehypothesisGeneticreasonsforbeinginefficientatproducinghealthDeprivationofresources(food)inuteroandearlychildhoodleadstoactivationof“thrifty”genesthatareusefulforsparseenvironmentalconditionsThese“thrifty”genesgoodforscarceenvironmentsbutbadinconditionsofabundanceMorelikelytodevelopdiabetes,obesity,andotherdisorderslaterinlifeDisparitiesarisebecausepoorerindividualsaremorelikelytohaveresourcedeprivationearlyinlifeThethriftyphenotypehypothesisThriftyphenotypehypothesisUsenaturalexperimentstotestthishypothesisArandomizedexperimentthatrandomlydeprivedsomechildreninuteroandnototherswouldbeprettyunethical!NaturalexperimentsuseenvironmentalshocksthatnaturallycreatecontrolandtreatmentgroupsEx:earthquakes,famine,snowstormsGoodnaturalexperimenteliminatesselectionbiasThethriftyphenotypehypothesisTheDutchfaminestudyNaturalexperiment:DutchfamineinWWII(Rosebloometal.2001)HollandsufferedafamineduetoaGermanblockadeoffoodCreatedtwobabygroups:ThoseinuteroduringfamineThoseconceivedafterfamineTwogroupsaresimilar,exceptforinuterodeprivationSohopefullynoselectionbias!Findings:BabiesinuteroduringfaminehadhigherratesofdiabetesandobesityinadulthoodThethriftyphenotypehypothesisThedirectincomehypothesisHypothesis:disparitiesexistbecauserichpeoplehavemoreresourcestodevotetohealthRichindividualshaveanexpandedPPFbecauseofextrafinancialresourcesExpandedPPF=higherH*thatcanbeobtainedThedirectincomehypothesisAllostaticloadhypothesisHypothesis:ProlongedorrepeatedstressisunhealthyandcancauseanincreasedrateofagingIntheGrossmanmodel,agingisrepresentedbyrateofdepreciationofhealthcapitalδHighstressloadleadstoahigherδTheallostaticloadhypothesisTheWhitehallstudyWhitehallstudybyMarmotatal.(1978,1991)CompareshealthstatusofBritishcivilservantsBritishcivilservantsrelativelyhomogenousinbackgroundandshareworkplaceenvironmentsAllBritishcitizenshavethesameaccesstohealthcarethroughtheNationalHealthService

Findings:Diseasemorbidityandmortalityrateshighestforlow-gradecivilservantsLow-gradecivilservantsreportedmorestressfulworkandhomeenvironmentsTheAllostaticLoadHypothesisIncomeinequalityhypothesisHypothesis:HealthdisparitiesarecausedbyanunequaldistributionofincomeRelatedtotheallostatic

loadhypothesisMoreequalsocietiesarelessstressfulandthereforehealthierPolicyimplications?IftheoryistruethenpolicymakersshouldaimatreducinginequalitywithinacommunityThehealthstatusofasocietymaydeclineevenifaverageincomerisesifincomebecomesmoreconcentratedTheDirectIncomeHypothesisAccesstocarehypothesisHypothesis:ThosewithhighincomescanaffordmoregeneroushealthinsurancecomparedtothoseoflowincomeButhealthdisparitiespersistincountrieswithuniversalhealthinsuranceCanadianyouth(CurrieandStabile2003)Britishcivilservants(Marmotetal.1978,1991)bothcountrieshaveequalaccesstohealthcare!TheaccesstocarehypothesisProductivetimehypothesisSESdifferencesarecausedbydisparitiesinhealth

BadhealthleadstolowerproductivetimeandthereforelesstimetoproduceincomeOreopoulosetal.(2008)andBlacketal.(2007)studysiblingsgrowingupinsamehousehold

Thosewithworsehealthduringinfancyhavehighermortalityrates,lowereducationalachievement,andloweradultearningsTheproductivetimehypothesisTheFuchshypothesisBadhealthdoesnotcauselowSES,andlowSESdoesnotcausebadhealthAthirdfactor–timepreference--causesboth!HealthandSESbothdeterminedbywillingnesstodelaygratificationPeoplewhoarewillingtodelaygratificationaremorewillingtoinvestinthingslikeeducationandhealthPeoplewillingtodelaygratificationhavehighdiscountfactorsδ

TheFuchshypothesisConclusionEachtheoryhassupportingevidenceandeachcanexplainsomesocioeconomichealthdisparitiesKeytakeaways:Better-educatedpeoplegenerallyhavebetterhealthevenwiththe