Journal of health economics
-
We evaluate the health effects of a reduction in New Zealand's minimum legal purchase age for alcohol. Difference-in-differences (DD) estimates show a substantial increase in alcohol-related hospitalizations among those newly eligible to purchase liquor, around 24.6% (s.e.=5.5%) for males and 22% (s.e.=8.1%) for females. ⋯ We do not find evidence that earlier access to alcohol is associated with learning from experience. We also present regression discontinuity estimates, but emphasize DD estimates since in a simulation of a rational addiction model DD estimates are closer than regression discontinuity estimates to the policy's true effect.
-
This paper studies the role of Medicare's premium policy in sorting beneficiaries between traditional Medicare (TM) and managed care plans in the Medicare advantage (MA) program. Beneficiaries vary in their demand for care. TM fully accommodates demand but creates a moral hazard inefficiency. ⋯ We characterize the demand-based premium policy that can implement the efficient assignment of enrollees to plans. If only a single premium is feasible, the second-best policy involves too many of the low-demand individuals in MA and a too low level of services relative to the first best. We identify approaches to using premium policy to revitalize MA and improve the efficiency of Medicare.
-
In response to increased risks of second-hand smoke exposure for children travelling in cars and its resulting deleterious health impacts, several jurisdictions passed legislation that bans smoking in private vehicles when children are present. In this study, I exploit a unique quasi-experiment from Canada and employ the difference-in-differences and triple-differences techniques to empirically evaluate this legislation. I find that the legislation reduces exposure to second-hand smoke inside cars for children. Further, there appears no marked increase in smoking at home after the implementation of the legislation.
-
In this paper, we examine the role of insurance coverage in explaining the generic competition paradox in a two-stage game involving a single producer of brand-name drugs and n quantity-competing producers of generic drugs. Independently of brand loyalty, which some studies rely upon to explain the paradox, we show that heterogeneity in insurance coverage may result in higher prices of brand-name drugs following generic entry. ⋯ However, with market segmentation occurring only after generic entry, the paradox can arise when the two types of drugs are weakly substitutable, provided, however, that the industry is not very profitable. In both cases, that is, when market segmentation is present in the pre-entry stage and when it is not, the paradox becomes more likely to arise as the market expands and/or insurance companies decrease deductibles applied on the purchase of generic drugs.
-
This paper exploits the discontinuity created by the minimum legal drinking age of 21 years to estimate the causal effect of increased alcohol availability on marijuana use. We find that consumption of marijuana decreases sharply at age 21, while consumption of alcohol increases, suggesting that marijuana and alcohol are substitutes. We further find that the substitution effect between alcohol and marijuana is stronger for women than for men. Our results suggest that policies designed to limit alcohol use have the unintended consequence of increasing marijuana use.