Dept. of Economics Marcos Vera-Hernández (m.vera@ucl.ac.uk)

Methods Topics -Structural estimation -Quasi-experiments -Randomized experiments Methods Health risk and insurance (value) Health risk and insurance (effect) Health care provider behaviour (incentives) Determinants of health production Other Topics

Risk and insurance Individual face the risk of illness Medical and/or long-term care expenditures Productivity losses Insurance is provided to insure against these risks NHS Disability benefits Private health care insurance Social care

Risk and insurance (value) What is the value of insurance, and what should be the size of the optimal coverage? Medicaid Insurance in Old Age (M. De Nardi & E. French) Why do the Elderly Save? The Role of Medical Expenses (M. De Nardi & E. French) Structural Estimation of a Principal-Agent Model: Moral Hazard in Medical Insurance (M Vera-Hernández) Two people with the same disability, if one is granted benefits and the other no. Will the one not granted benefits work more?

Risk and insurance (value) Structural methodology: Budget and time constraint (salary might depend on health) Price of health investment (It) depends on insurance coverage

Risk and insurance (value) Individuals are assumed to choose their consumption, leisure and health investments by maximizing their utility function Parameters can be estimated with data on revealed choices (consumption, leisure, health investments) rather than stated preferences Once we have the parameters, we “know” what individuals will choose (consumption, leisure, health investments) under different scenarios (i.e. generous or poor coverage) We can estimate the value of the generous versus poor coverage

Risk and insurance (effect) What is the effect of giving insurance on individuals’ health care consumption health labour supply ? Difficult to estimate the causal effect: Those anticipating higher medical use have an incentive to take up additional insurance Those awarded disability benefit are more ill than those rejected Two people with the same disability, if one is granted benefits and the other no. Will the one not granted benefits work more?

Risk and insurance (effect) Quasi-experimental methodology The Effect of Disability Insurance Receipt on Labor Supply (E. French) Random allocation of applicants to disability insurance assessors One person with a tougher assessor and another one with a softer assessor The one with the tougher assessor is more likely to be rejected Will he/she end up working more?

Risk and insurance (effect) Quasi-experimental methodology Health Insurance and Child Health: Evidence from Mexico (G. Conti) Roll out of the insurance scheme across municipalities at different moments of time Difference-in-differences Track how health improves in municipalities as they are getting the insurance scheme implemented

Risk and insurance (effect) Quasi-experimental methodology Risk Protection, Service Use, and Health Outcomes under Colombia's Health Insurance Program for the Poor (M. Vera-Hernandez) Regression discontinuity Useful if access to an intervention or care changes in stark way if the value of a score is higher or lower than a threshold Example: Newborns < 1.5 Kgs. get extra care in hospitals

Risk and insurance

Health care provider incentives Using data from the Quality Outcomes Framework to estimate whether different activities are complements or substitutes (M. Vera-Hernandez) Whether effort in one activity increases or reduces the marginal cost of effort of another activity (multi-tasking) 3 cluster randomized experiments testing different type of incentives (China, India, Nigeria) Comparing what health care providers “do” vs. “what they know”) (M. Vera-Hernandez) Audit studies in India on child diarrhoea, pneumonia, and TB

Health production Early childhood investments substantially boost adult health (G. Conti) Randomized childcare experiment in the 70s in the US Education and health (G. Conti, A. Cabrales) G. Conti using genetic information A. Cabrales exploiting a reform that increased minimum working age from 14 to 16 in Spain (difference-in-differences) Effect of breastfeeding on health and cognition (M. Vera-Hernandez in collaboration with Centre Longitudinal Studies)

Health production Nutrition in developing countries (O. Attanasio, M. Vera-Hernandez in collaboration with Institute of Global Health) Nutritional supplements and anemia Childcare and child nutrition Home visiting programs that provide information on child nutrition

Other areas of work/interest Biomarkers and Self-reported Sexual Behaviors (A. Paula) Combine biomarkers and self-reported data to estimate high risk sexual behaviour in Africa Design of clinical trials to consider behavioral responses (A. Paula) two groups: high and low placebo probability Mental health (G. Conti, I. Rasul) Take up of medical innovation (M. Vera-Hernández) Treatment effects and Bayesian econometrics (Toru Kitagawa) The new clinical trial scheme would allow to consider the effect that diet and other health behaviors might have on the treatment efficacy

Any questions: m.vera@ucl.ac.uk Thank you!