Health, Health Care, and the Environment: Econometric Evidence from German Micro Data

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Abstract:The paper develops and applies a Grossman-style health production model set up in discrete time to explain the impact of environmental pollution on the demand for both health and health care. In order to introduce the environment, our analysis takes changes in environmental conditions to influence the rate at which an individual's stock of health depreciates. While the theoretical part of our paper also contains a discussion of the full model, we restrict our analysis to a submodel which is known as the pure investment model. lbis is because the other submodel, the pure consumption model, implies a rather implausible case of satiation with respect to the individual's preferences.Our empirical findings' are based on data taken from the German Socio-economic Panel (SOEP). The stock of health capital and environmental pollution are treated as latent variables and estimated using a LINeS model. The quality of the environment turns out to be an important determinant of health capital. From the point of view of health economics, improvements in environmental conditions can be interpreted as preventive measures. In terms of prevention, public policies designed to protect the environment also yield significant health effects. As regards health care demand the influence is not dearcut, Le. one cannot necessarily expect a reduction in resource use.

New impacts of Grossman’s health investment model and the Russian demand for medical care

“…However, productions in the human capital-dependent field of health investments generally provide sufficient justification for decreasing returns to scale because of reasonably less automation and rationalization. Despite this fact, the majority of theoretical studies that utilize Grossman's pure investment model to derive a demand function for health care apply a health investment production function with constant returns to scale (e.g., Wagstaff 1986Wagstaff , 2002Erbsland et al 2002;Joyce 1987). However, inspired by the basic theoretical remarks of Ehrlich and Chuma (1990), we assume the health investment production process to be subject to decreasing returns to scale, i.e., θI t ð Þ > f I θM t ð Þ; θm t ð Þ; E t ð Þ ð Þw i t h a s c a l i n g f a c t o r θ > 0.…”

Grossman's Missing Health Threshold

“…But this relationship is predicted to be positive in the traditional solution of the Grossman model (see equation 27; those who consume more medical care are healthier). Further, the negative relationship between health and medical care is found to be the most statistically significant of any relationship between medical care and any of the independent variables (see, e.g., Grossman 1972a; Wagstaff 1986Wagstaff , 1993Leu and Doppman 1986;Leu and Gerfin 1992;van Doorslaer 1987;Van de Ven and van der Gaag, 1982;Erbsland, Ried and Ulrich 2002).…”

“…The Grossman model has been tested in a number of empirical studies on a variety of datasets from different countries (Grossman 1972a;Wagstaff 1986Wagstaff , 1993Leu and Doppman 1986;Leu and Gerfin 1992;van Doorslaer 1987;Van de Ven and van der Gaag, 1982;Erbsland, Ried and Ulrich 2002;. 16 Despite the large 16 Grossman (1972a) employs the 1963 health interview survey conducted by the National Opinion Research Center (NORC) of the U.S. civilian noninstitutionalized population.…”

“…Van de Ven and van der Gaag (1982) employ a MIMIC model with latent health and data from a health-care survey among 8000 households in The Netherlands. Erbsland, Ried and Ulrich (2002) use data from the German Socio Economic Panel (SOEP). They use a model with a latent health and a latent environment variable and restrict the analysis to the working population and to those with a positive demand for medical services.…”

“…Empirical literature: As discussed earlier the most striking feature of structural form estimates of the demand for medical care (see, e.g., Grossman 1972a; Wagstaff 1986Wagstaff , 1993Leu and Doppman 1986;Leu and Gerfin 1992;van Doorslaer 1987;Van de Ven and van der Gaag 1982;Erbsland, Ried and Ulrich 2002) is the persistent and highly statistically significant negative relation found between measures of health and measures of medical care. The studies employ a variety of methodologies and a variety of datasets representing different cultural and institutional settings in a number of different countries (Europe and U.S.), yet their findings are largely in agreement with one another.…”