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: Terms of use: Documents inThe 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

“…The goodness of fit values (pseudo R 2 values) of our estimates mirror the improvement from the null model to the fitted model and hence indicate the total variability explained by the model. The presented (pseudo) R 2 values are in line with those obtained by Wagstaff (1986Wagstaff ( , 1993, Gerdtham et al (1999), and Erbsland et al (1995). The results in Table 2 imply that, for all three dependent variables, higher incomes Y(t) tend to increase the demand for medical care.…”

“…Since Grossman assumes instantaneous health adjustments, the optimal stock of health capital is assumed to equal the actual stock of health capital. But empirical studies that have tested the implications of Grossman's model (see, e.g., Wagstaff 1986;Leu and Gerfin 1992;Erbsland et al 1995;Galama et al 2012) indicate that the actual health stock has a significantly negative coefficient in the demand function for medical care. 1 This implies that sick people tend to use more medical care (Kaestner 2013).…”

A Contribution to Health Capital Theory

“…In other words, the healthy are those that invest more in health (e.g., equation 13 in Wagstaff, 1986a; see also Galama and Kapteyn, 2009). Empirical studies strongly reject this prediction: 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 in several empirical studies (see, e.g., Grossman, 1972a;Wagstaff, 1986aWagstaff, , 1993Leu and Doppman, 1986;Leu and Gerfin, 1992;van Doorslaer, 1987;Van de Ven and van der Gaag, 1982;Erbsland, Ried and Ulrich, 2002). 42 Third, Case and Deaton (2005) argue that while health production models can explain differences in the level of health between socioeconomic status (SES) groups they cannot explain differences in the rate of health deterioration between SES groups.…”

“…Third, there was the incorrect notion that Ehrlich and Chuma had changed the structure of the model substantially and that the alleged indeterminacy of health investment did not apply to the original formulation in discrete time (e.g., Reid, 1998). Last, because of the increased complexity of a health production model that includes endogenous length of life (demand for longevity) Ehrlich and Chuma (1990) had to resort to a particular sensitivity analysis, suitable to optimal control problems (Oniki, 1973), 2 E.g., Bolin et al (2001Bolin et al ( , 2003; Case and Deaton (2005) ;Erbsland, Ried and Ulrich (2002); Jacobsen (2000); Leu and Gerfin (1992); Liljas (1998); Nocera and Zweifel (1998); Wagstaff (1986a); Ried (1996Ried ( , 1998. To the best of my knowledge the only exception is an unpublished working paper by Dustmann and Windmeijer (2000) who take the model by Ehrlich and Chuma (1990) as their point of departure.…”

Health inputs and cumulative health deficits among the older Chinese

“…With few exceptions (e.g., Cropper, 1981; Erbsland, Ried, & Ulrich, 1995), the health economics literature has also neglected ecological factors, including structural community and neighborhood factors. Importantly, epidemiological research has shown that ecological factors may significantly influence level and dynamics of health stock (Balfour & Kaplan, 2002; Kawachi & Berkman, 2003).…”