Sample Selection Correction in Panel Data Models When Selectivity Is Due to Two Sources

This paper proposes a specification of Wooldridge's (1995) two step estimation method in which selectivity bias is due to two sources rather than one. The main objective of the paper is to show how the method can be applied in practise. The application concerns an important problem in health economics: the presence of asymmetric information in the private health insurance markets on which there exists a large literature. The data for the empirical application is drawn from the 2003/2004 Medical Expenditure Panel Survey in conjunction with the 2002 National Health Interview Survey.multiple sample selection bias; panel data; asymmetric information.

Adverse selection in the U.S. health insurance markets: Evidence from the MEPS

We use the 2003/2004 Medical Expenditure Panel Survey in conjunctions with the 2002 National Health Interview Survey to test for adverse selection in the U.S. private health insurance market. The key idea is to test whether the individuals who are more exposed to health risks also buy insurance contracts with more coverage or higher expected payments. The critical statistical problem is that the extension of insurance is only measured for those who are insured and face positive health care expenditure. So there is a possible sample selection bias effect. The procedure used is based on a method suggested by Wooldridge (1995). The method also accounts for heterogeneity across individuals. The simultaneous account taken of both possible sources of bias is new for this kind of application.adverse selection, health insurance, risk profile

Sample selection correction in panel data models when selectivity is due to two sources

This paper proposes a specification of Wooldridge's (1995) two step estimation method in which selectivity bias is due to two sources rather than one. The main objective of the paper is to show how the method can be applied in practice. The application concerns an important problem in health economics: the presence of adverse selection in the private health insurance markets on which there exists a large literature. The data for the empirical application is drawn from the 2003/2004 Medical Expenditure Panel Survey in conjunction with the 2002 National Health Interview Survey.

An Economic Evaluation of Life-Style and Air-pollution-related Damages: Results from the BRFSS

This paper uses the Behavioral Risk Factor Surveillance System (2001) data in conjunctions with Environmental Protection Agency data to investigate on how individual health habits, air outdoor pollution and diseases combine to affect the likelihood of good health status and the amount of health investments. The environment is a second-best world characterized by uncertainty on the level of health, in which individuals are not able to avoid health shocks completely. Models are estimated using three different measures of overall health: a measure of self-assessed health and two health outcomes indicators (blood pressure and activity limitations due to health problems).Health production, multivariate probit, life-style, pollution, self-assessed health, health outcome

From theory to implementation of the best instrument to protect human health: a brief overview

This paper presents a survey of methods of regulations with focus on pollution abatement and of various approaches to the issue of measuring quantities such as the marginal benefit of improved health that are crucial in view of implementing the regulation. Since pollution is a public bad, in general the efficient level of pollution can only be reached by way of some sort of public intervention. The paper's focus is on so-called marketbased mechanisms, which in turn are classified into price-based mechanisms (pollution taxes) and quantity-based mechanisms (tradeable permits). The basic framework for addressing the comparison between the two types of mechanisms is Weitzman (1974). In order to actually choose between regulation methods and to eventually implement chosen methods, estimates are needed of some crucial quantities, in particular of marginal costs and benefits of pollution abatement. The most problematic one is of course marginal benefit. Therefore the paper considers various approaches to the measurement of marginal benefits.marginal costs, marginal benefits, pollution regulation, health

Regolazione dei prezzi o razionamento: l'efficacia dei due sistemi di allocazione nella fornitura di risorse scarse a coloro che ne hanno maggiore necessita'..

Usando un semplice modello formale, dovuto a Martin Weitzman, questo paper analizza sotto quali condizioni il sistema dei prezzi sia piu' efficace del sistema di razionamento, nel fornire un determinato bene, presente in quantita'  scarsa, a coloro che ne hanno una maggiore necessita' , in presenza di informazione incompleta. La risposta dipende dalla distribuzione dei bisogni e dalla distribuzione del reddito. Il sistema dei prezzi gode di un grande vantaggio comparato, nel fornire un bene scarso e nel raggiungere i piu' bisognosi, quando nella societa'  la distribuzione dei bisogni e' molto dispersa e la distribuzione del reddito e' pressoche' egalitaria. Invece, il razionamento risulta essere piu' efficace quando i bisogni sono uniformi ma vi e' una forte ineguaglianza nella distribuzione del reddito. Rielaborando tale modello, inoltre, e' possibile dimostrare che in presenza di una funzione cubica di perdita di efficacia, il vantaggio comparato di un sistema sull'altro dipende dall'asimmetria della distribuzione del reddito. Si mostra, infine, come il meccanismo di razionamento mediante coda possa rappresentare una possibile soluzione al problema dell'informazione incompleta..

The indirect effect of fine particulate matter on health through individuals' life-style

Limited literature has been published on the association between environmental health indicators, life-style habits and ambient air pollution. We have examined the association of asthma prevalence and the amount of health investment with daily mean concentrations of particulate matter (PM) with a mass median aerodynamic diameter less than 2.5 mm (PM2.5) in 16 metropolitan areas in U.S. using the Behavioral Risk Factor Surveillance System (2001) data in conjunction with the Air Quality System data collected by the Environmental Protection Agency. A multivariate probit approach has been used to estimate recursive systems of equations for environmental health outcomeand life-styles. A piecewise linear relationship has been postulated to describe the association between health outcome, health investment and pollution using the procedure mkspline from STATA 10. This model has allowed for fitting a "breakpoint" in the probit functions. We have assumed one change point at AQI value of 100 which corresponds to the US national air quality standard. The most interesting result concerns the influence of pollution on health-improving life-style choices: below a specified threshold concentration (AQI=100) a positive linear association exists between exposure to PM2.5 and health investments; above the threshold the association becomes negative. Hence, only if ambient pollution is in the 'satisfactory range' (AQI level at or below 100), individuals will have incentive to invest in health.health production, multivariate probit, mkspline, lifestyle, fine particulate, asthma

The Role of Employment Protection Legislation Regimes in Shaping the Impact of Job Disruption on Older Workers’ Mental Health in Times of COVID-19

This study exploits individual data from the 8th wave of the Survey of Health, Ageing and Retirement in Europe (SHARE) and the SHARE Corona Survey to investigate the mental health consequences of COVID-19 job disruption across different European countries. It focuses on older workers (aged 50 and over) who were exposed to a higher risk of infection from COVID-19 and were also more vulnerable to the risk of long-term unemployment and permanent labour market exits during economic downturns. The relationship between job disruption in times of COVID-19 and older workers' mental health is investigated using differences in country-level employment legislation regimes in the EU. European countries are clustered into three macro-regions with high, intermediate and low employment regulatory protection regulations, using the Employment Protection Legislation (EPL) aggregate score proposed by the OECD. Results reveal a clear EPL gradient: job disruption has a positive and significant impact on older workers’ psychological distress especially in those countries where EPL is more binding. The present findings suggest possible mitigating measures for older unemployed in the EU countries with higher Employment Protection legislation.JRC.S.3 - Science for Modelling, Monitoring and Evaluatio

Soil Consumption and Organised Crime: The Case of the Italian Region of Apulia

This paper investigates the potential effect that the expansion of organised crime may have on the long-term artificial land development and soil consumption by focusing specifically on the Italian region of Apulia, a peculiar case of successful mafia transplantation. This is an understudied research area that occupies the intersection between the study of organised crime’s economic consequences and the study of environmental issues. Our estimation strategy, which relies on an IV approach, exploits the forced resettlement programme that was introduced by an Italian Law from 1956 that was applied to those criminals who were suspected of belonging to the mafia’s organisations as an instrument. Specifically, the forced resettlement programme is interpreted as an exogenous shock for the territorial spread of organised crime. Our findings, robust under different specifications of the model, show that the penetration and the expansion of organised crime has produced significant effects on long-term, artificial land development and on soil consumption.JRC.S.3 - Science for Modelling, Monitoring and Evaluatio