hefpa paper digest i
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HEFPA Paper Digest I
Supon LimwattananonSupon Limwattananon
WP
2
WP
1
Health shocks
- Labor supply
- Income (earned and unearned) - Medical spending
Food consumption Non-food consumption
- Health insurance
- Coping methods:
- Saving - Gift - Borrowing/loan - Asset
- Social insurance/security
- Informal solidarity
Consumption insurance
Financial risks
Paper 3
Which kind of insurance can protect welfare loss?
• For common minor illnesses vs. for unanticipated major illnesses
• First-dollar coverage with low capped benefits vs. catastrophic insurance with patient cost-sharing
1
1 Townsend (1995); Kochar (1995) found families in LICs were able to insure illness shocks fairly well.
Objective
FindingsSection III:
Section IV:
Panel data
Fixed-effects model
(1) ADLs vs. (2) Self-reported illness symptoms
Symptom lasting > 1 mo.Any symptom
1.
2.12.21.1
1.2
mean (SD)
%
%%mean (SD)
mean (SD)
hij
Problems on self-reported illnesses
Lij
3.
2.
1.1
1.2
Xij
Labor supply/wk
This has to be imputed for informal sectors
per wk
(C/n)ij
hij
Xij
Lij (1.1)
2.1
2.2
1.
per wk
Section III
hij 2.1 2.2 1.
Lij
1.1
1.2
2.
3.
per wk
Interpretation:
Moving from being able to perform all ADLs to being able to perform none would result in
- lowering hours of work by 30.9 hours per week (84% of baseline mean hours)
- 73.8% likelihood of becoming labor-force nonparticipant
- a reduction of earnings by Rp.20,170 (~ baseline mean earnings)
- an increase in medical spending of Rp.1,180
Section III
Section IV: Consumption insurance
ln(C/n)ij
hij
Xij
2.1
2.2
1.
Moving from being able to perform all ADLs to being able to perform none would lower consumption by 19.5%
Section IV
Section V: The extent to which households are able to insure consumption
Biased est.: For each Rp. that income falls, consumption falls by only 3%
Unbiased est.: For each Rp. that income falls, consumption falls by 35%
Households are able to insure only 65% of the consumption with respect to income loss due to a loss in ADL
Instrument Variable (IV)
Y = 1 + 1h + Z1 + 1
C = 2 + 2 + X2 + 2
^
YPredicted Y as an instrument
Step 1. Income
Step 2. Consumption
C = 0 + 0Y + X0 + 0
OLS method
Y is endogenous: some unobserved variables affect both Y and C.
Hence, Is biased (change in Y affecting change in C is spurious).
Consumption:
IV method
Paper 4
Sht-1
Sht-1
1.1
1.21.
2.
3.1
3.2
ln yht
1.
2.12.2
3.
Sht-1
Xht
e.g., gift, remittance, pension, compensation
e.g., wage/salary, agriculture, family business
esp., direct, nonmedical costs of care
yht
Rural
Urban
Effects on income per household
An urban household’s earned income
is more vulnerable to death shocks
than an rural household’s.
Statistically non-significant
Regression coefficient and (t-statistics)
Statistically non-significant
An increase in unearned income
offsets a decrease in earned income;
whereby other-than death shocks in
urban area are larger than in rural area.
Urban
Rural
Effects on income per capita
Effect of a death on per capita income
Is statistically non-significant and is
less than on household income.
Effects on medical expenditure (1)
Urban
Rural
Effects on medical expenditure (2)
Insured
Uninsured
Effects on food consumption
Rural
Urban
Households cannot smooth their food consumption in the face of some health shocks!
Effects on non-food/non-medical consumption
Urban
Rural
The evidence is more mixed!
Pr (y>0)
E[y|y>0](Housing)
Health shocks
Year 2004-05(wave 1: N = 5,673)
Year 2005-06(wave 2: N = 5,495)
% Dead: Any HH members 0% 2.3%
% Ill: Any HH members 57.0% 53.8%
% Ill: HH head 37.8% 35.1%
% Ill: Other than head 19.1% 18.7%
% Ill: Working member 43.4% 40.7%
% Hospitalized: Any HH members 21.3% NA
% Hospitalized: HH head 10.3% NA
% Hospitalized: Other than head 11.0% NA
% Hospitalized: Working member 14.7% NA
Economic consequencesYear 2005-06
(wave 2)Year 2006-07
(wave 3)
Mean Unearned income (Baht) 911 992
Mean Earned income (Baht) 4,357 4,664
Mean Total income (Baht) 5,269 5,656
% Catastrophic health exp. (>10% total exp.) 3.3% 3.3%
% Positive health exp. 57.3% 51.0%
Mean Health exp. (Baht), given positive 98 104
Mean Food expenditure (Baht) 1,173 1,260
Mean Nonfood/non-health exp. (Baht) 1,867 2,186
% Positive education exp. 56.2% 55.8%
Mean Education exp. (Baht), given positive 269 289
Covariates for adjustment
Year 2006 Year 2007
% Urban 29.1% 31.7%
% Rural 70.9% 68.3%
% Bangkok 15.8% 17.1%
% Central 16.9% 17.4%
% North 19.1% 19.4%
% Northeast 35.2% 35.0%
% South 12.9% 11.1%
Mean Age (years) 51.5 51.8
% Male 70.1% 70.1%
% Couple 73.9% 75.2%
% Primary educated 73.9% 71.2%
% Secondary educated 14.2% 15.2%
% Higher educated 11.8% 13.6%
Household head
Effect on per capita income
Thailand –whole country
Health shock Unearned Earned Total
Dead: Any HH members 0.778 -0.333 0.053
Ill: Any HH members 0.556 0.259 0.073
Ill: HH head 0.575 0.301 0.208
Ill: Other than head 0.040 -0.027 -0.175
Ill: Working member 0.357 0.143 0.083
Hospitalized: Any HH members 0.488 0.097 0.223
Hospitalized: HH head 0.641 -0.201 0.219
Hospitalized: Other than head 0.235 0.355 0.176
Hospitalized: Working member 0.380 -0.020 0.184
Effect on per capita incomeThailand –urban vs. rural
Health shock Unearned Earned Total
Dead: Any HH members 0.745 -0.943 -0.393
Hospitalized: Any HH members 0.652 -0.153 -0.037
Hospitalized: HH head 0.536 -0.438 0.017
Hospitalized: Other than head 0.617 0.142 -0.078
Hospitalized: Working member 0.280 -0.118 -0.027
Dead: Any HH members 0.751 -0.106 0.177
Hospitalized: Any HH members 0.448 0.183 0.334
Hospitalized: HH head 0.698 -0.139 0.289
Hospitalized: Other than head 0.108 0.444 0.299
Hospitalized: Working member 0.414 -0.023 0.233
Ru
ral
U
rba
n
Effect on per capita health spending (W2)
Thailand –whole country
Health shock (W1)Catast.
exp.
Positive
exp.
Exp.
if positive
Overall
exp.
Ill: Any HH members 0.009 0.088 0.136 0.767
Ill: HH head 0.007 0.070 0.108 0.611
Ill: Other than head 0.004 0.034 0.046 0.302
Ill: Working member 0.011 0.089 0.135 0.775
Hospitalized: Any HH members 0.017 0.053 0.154 0.517
Hospitalized: HH head 0.017 0.052 0.208 0.528
Hospitalized: Other than head 0.014 0.042 0.066 0.390
Hospitalized: Working member 0.018 0.049 0.170 0.488
Effect on per capita health spending (W2)
Thailand –urban vs. rural
Health shock (W1)Catast.
exp.
Positive
exp.
Exp.
if positive
Overall
exp.
Hospitalized: Any HH members 0.020 0.039 0.227 0.478
Hospitalized: HH head 0.026 0.024 0.306 0.407
Hospitalized: Other than head 0.009 0.044 0.107 0.439
Hospitalized: Working member 0.003 0.015 0.070 0.176
Hospitalized: Any HH members 0.017 0.058 0.130 0.530
Hospitalized: HH head 0.013 0.062 0.174 0.569
Hospitalized: Other than head 0.016 0.042 0.054 0.371
Hospitalized: Working member 0.023 0.059 0.208 0.580
Ru
ral
U
rba
n
Effect on per capita health spending (W3)
Thailand –CS vs. SS vs. UC
Health shock (W2)Catast.
exp.
Positive
exp.
Exp.
if positive
Overall
exp.
Ill: Any HH members 0.024 0.122 0.210 1.092
Ill: HH head 0.0007 0.042 0.213 0.435
Ill: Any HH members 0.017 0.070 0.167 0.655
Ill: HH head 0.004 0.070 0.182 0.627
Ill: Any HH members 0.016 0.068 0.292 0.695
Ill: HH head 0.018 0.047 0.326 0.549
UC
SS
C
S
Effect on per capita non-health spending
Thailand –whole country
Health shock Food Nonfood
Dead: Any HH members -0.124 0.216
Ill: Any HH members -0.030 0.005
Ill: HH head 0.026 0.059
Ill: Other than head -0.079 -0.073
Ill: Working member -0.0004 0.062
Hospitalized: Any HH members -0.098 -0.073
Hospitalized: HH head -0.058 -0.009
Hospitalized: Other than head -0.114 -0.116
Hospitalized: Working member -0.080 0.005
Effect on per capita non-health spending
Thailand –urban vs. rural
Health shock Food Nonfood
Dead: Any HH members -0.115 -0.324
Hospitalized: Any HH members -0.104 -0.215
Hospitalized: HH head 0.024 -0.099
Hospitalized: Other than head -0.198 -0.275
Hospitalized: Working member -0.032 -0.083
Dead: Any HH members -0.120 0.415
Hospitalized: Any HH members -0.100 -0.026
Hospitalized: HH head -0.090 0.017
Hospitalized: Other than head -0.086 -0.060
Hospitalized: Working member -0.099 0.029
Ru
ral
U
rba
n
Effect on per capita education spending
Thailand –whole country
Health shockPositive
exp.
Exp.
if positive
Overall
exp.
Dead: Any HH members -0.043 -0.164 -0.432
Ill: Any HH members -0.026 0.028 -0.214
Ill: HH head -0.036 0.057 -0.304
Ill: Other than head 0.012 -0.029 0.098
Ill: Working member -0.057 0.062 -0.465
Hospitalized: Any HH members -0.024 -0.057 -0.248
Hospitalized: HH head -0.026 0.063 -0.198
Hospitalized: Other than head -0.017 -0.144 -0.239
Hospitalized: Working member -0.048 0.070 -0.385
Effect on per capita education spending
Thailand –urban vs. rural
Health shockPositive
exp.
Exp.
if positive
Overall
exp.
Dead: Any HH members -0.045 -0.426 -0.608
Hospitalized: Any HH members -0.073 -0.318 -0.832
Hospitalized: HH head -0.058 -0.236 -0.614
Hospitalized: Other than head -0.072 -0.331 -0.852
Hospitalized: Working member -0.098 -0.149 -0.991
Dead: Any HH members -0.039 -0.109 -0.345
Hospitalized: Any HH members -0.007 0.020 -0.037
Hospitalized: HH head -0.014 0.147 -0.052
Hospitalized: Other than head 0.002 -0.089 -0.015
Hospitalized: Working member -0.029 0.129 -0.166
Ru
ral
U
rba
n
VHLSS (Vietnam Household Living Standards Survey)
Coping Strategies
Source: VHLSS 2006 Report
Paper 5
(coping strategies)C = 2,580/2,760 = 0.93
Mean of proportion of exp. financed by coping
Coping-adjusted health expenditure ratio (P)(High spending households)
P
= unadjusted
C
Cumulative distributions of health expenditure ratiosw = Unadjusted; P = Coping-adjusted
(w)
(P)
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