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Category: Health

Published October 21, 2011

Health Insurance: Learning from Emerging Economies

Perhaps surprisingly, the most interesting incentives have been developed in an emerging economy: South Africa. The Discovery group, based in Johannesburg, has crafted a programme called Vitality that applies the “air miles” model to health care. You earn points by exercising, buying healthy food or hitting certain targets. You rise through various levels, from blue to gold, as you accumulate points (rewards are adjusted to your starting level of fitness to give everybody a chance of making progress). And you are given a mixture of short- and long-term rewards ranging from reduced premiums to exotic holidays.

Continue readingHealth Insurance: Learning from Emerging Economies

Published October 5, 2011

Eye Disease and Development?

You read that right: Eye disease and development. I was intrigued when I saw that it was the title of a new working paper (the link opens a .pdf document) on the NEP-DEV mailing list. After reading the abstract, the title made a lot more sense:

This research advances the hypothesis that cross-country variation in the historical incidence of eye disease has influenced the current global distribution of per capita income. The theory is that pervasive eye disease diminished the incentive to accumulate skills, thereby delaying the
fertility transition and the take-off to sustained economic growth. In order to estimate the influence from eye disease incidence empirically, we draw on an important fact from the field of epidemiology: Exposure to solar ultraviolet B radiation (UVB-R) is an underlying determinant of several forms of eye disease; the most important being cataract, which is currently the leading cause of blindness worldwide. Using a satellite-based measure of UVB-R, we document that societies more exposed to UVB-R are poorer and underwent the fertility transition with a significant delay compared to the forerunners. These findings are robust to the inclusion of an extensive set of climate and geography controls. Moreover, using a global data set on economic activity for all terrestrial grid cells we show that the link between UVB-R and economic development survives the inclusion of country fixed effect.

I have not had a chance to read the paper yet, but I wonder just how unpredictable UVB-R is within a given society, and so whether it is truly exogenous to economic growth. This is a compelling finding nevertheless.

Published September 30, 2011

Coughing Tiger, Sickened Dragon

In dozens of rural villages in China’s western provinces, one of the first things primary school kids learn is what made their education possible: tobacco.

“On the gates of these schools, you’ll see slogans that say ‘Genius comes from hard work — Tobacco helps you become talented,'” said Xu Guihua, secretary general of the privately funded lobby group Chinese Association on Tobacco Control. The schools are sponsored by local units of China’s government-owned monopoly cigarette maker. “They are pinning their hopes on young people taking up smoking.”

Anti-tobacco groups say efforts to reduce sales in the world’s largest cigarette consumer, such as a ban on smoking in public places introduced in May, have been hampered by light penalties, a lack of education about the dangers of smoking and the fact that the regulator, the State Tobacco Monopoly Administration, also runs the world’s biggest cigarette maker, China National Tobacco Corp.

This is from an article on Bloomberg.com in which I learned that China has 320 million smokers. Like Princeton’s Anne-Marie Slaughter replied over Twitter, that’s almost the size of the US population!

And regarding the State Tobacco Monopoly Administration owning China National Tobacco Corp., I think I’ve found the perfect counterexample for when I teach about incentive compatibility in the law and economics seminar I teach in the spring…