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HEFPA Paper Digest I

HEFPA Paper Digest I. Supon Limwattananon. WP2 WP1. Health shocks - Labor supply - Income (earned and unearned) - Medical spending Food consumption Non-food consumption. - Health insurance - Coping methods: - Saving - Gift - Borrowing/loan - Asset.

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HEFPA Paper Digest I

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  1. HEFPA Paper Digest I Supon Limwattananon

  2. WP2 WP1

  3. 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 Financial risks Consumption insurance

  4. Paper 3

  5. 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.

  6. Objective

  7. Findings Section III: Section IV:

  8. Panel data

  9. Fixed-effects model

  10. (1) ADLs vs. (2) Self-reported illness symptoms hij 1. mean (SD) % 2.1 2.2 % % mean (SD) mean (SD) Any symptom Symptom lasting > 1 mo. 1.1 1.2

  11. Problems on self-reported illnesses

  12. per wk (C/n)ij 3. 2. 1.1 1.2 Lij This has to be imputed for informal sectors /wk Labor supply Xij

  13. hij Xij Lij(1.1) Section III per wk 2.1 2.2 1.

  14. 2.1 2.2 1. hij 1.1 1.2 2. 3. per wk Lij 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

  15. Section III

  16. Section IV: Consumption insurance

  17. hij Xij ln(C/n)ij 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%

  18. Section IV

  19. 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

  20. Instrument Variable (IV) OLS method C = 0 + 0Y + X0 + 0 Consumption: Y is endogenous: some unobserved variables affect both Y and C. Hence,  Is biased (change in Y affecting change in C is spurious). IV method Y = 1 + 1h + Z1 + 1 Step 1. Income C = 2 + 2 + X2 + 2 Step 2. Consumption Predicted Y as an instrument

  21. Paper 4

  22. Sht-1

  23. Sht-1

  24. 1.1 1.2 1. 2. 3.1 3.2 ln yht 1. 2.1 2.2 3. Sht-1 Xht e.g., gift, remittance, pension, compensation e.g., wage/salary, agriculture, family business esp., direct, nonmedical costs of care

  25. yht

  26. Urban Rural Effects on income per household Regression coefficient and (t-statistics) An urban household’s earned income is more vulnerable to death shocks than an rural household’s. 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. Statistically non-significant

  27. Effects on income per capita Urban Effect of a death on per capita income Is statistically non-significant and is less than on household income. Rural

  28. Effects on medical expenditure (1) Urban Rural

  29. Effects on medical expenditure (2) Insured Uninsured

  30. Urban Rural Effects on food consumption Households cannot smooth their food consumption in the face of some health shocks!

  31. Urban Rural Effects on non-food/non-medical consumption The evidence is more mixed!

  32. Pr (y>0) E[y|y>0] (Housing)

  33. Health shocks

  34. Economic consequences

  35. Covariates for adjustment Household head

  36. Effect on per capita incomeThailand –whole country

  37. Effect on per capita incomeThailand –urban vs. rural RuralUrban

  38. Effect on per capita health spending (W2)Thailand –whole country

  39. Effect on per capita health spending (W2)Thailand –urban vs. rural RuralUrban

  40. Effect on per capita health spending (W3)Thailand –CS vs. SS vs. UC UCSS CS

  41. Effect on per capita non-health spendingThailand –whole country

  42. Effect on per capita non-health spendingThailand –urban vs. rural RuralUrban

  43. Effect on per capita education spendingThailand –whole country

  44. Effect on per capita education spendingThailand –urban vs. rural RuralUrban

  45. VHLSS (Vietnam Household Living Standards Survey) Coping Strategies Source: VHLSS 2006 Report

  46. Paper 5

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