The empirical content of models with multiple equilibria in economies with social interactions
We study a general class of models with social interactions that might display multiple equilibria. We propose an estimation procedure for these models and evaluate its efficiency and computational feasibility relative to different approaches taken to the curse of dimensionality implied by the multiplicity. Using data on smoking among teenagers, we implement the proposed estimation procedure to understand how group interactions affect health-related choices. We find that interaction effects are strong both at the school level and at the smaller friends-network level. Multiplicity of ...
Medical Expenses and Saving in Retirement: The Case of U.S. and Sweden
Many U.S. households have significant wealth late in life, contrary to the predictions of a simple life-cycle model. In this paper, we document stark differences between U.S. and Sweden regarding out-of-pocket medical and long-term-care expenses late in life, and use them to investigate their role in discouraging the elderly from dissaving. Using a consumption-saving model in retirement with significant uninsurable expense risk, we find that medical expense risk accounts for a quarter of the U.S.-Sweden difference in retirees' dissaving patterns. Furthermore, medical expense risk affects ...
What do happiness and health satisfaction data tell us about relative risk aversion?
In this paper we provide estimates of the coefficient of relative risk aversion using information on self-reports of subjective personal well-being from the 2006 Gallup World Poll. We expand the existing literature on the use of happiness data to analyze economic issues by considering the implications of allowing for health state dependence in the utility function. Our estimates of relative risk aversion using pooled data from various country groupings are smaller than one, suggesting less concavity than log utility. We also find that controlling for health dependence generally reduces these ...
Intergenerational Health Mobility in the US
Studies of intergenerational mobility have largely ignored health despite the central importance of health to welfare. We present the first estimates of intergenerational health mobility in the US by using repeated measures of self-reported health status (SRH) during adulthood from the PSID. Our main finding is that there is substantially greater health mobility than income mobility in the US. A possible explanation is that social institutions and policies are more effective at disrupting intergenerational health transmission than income transmission. We further show that health and income ...
Inequality and Mortality: New Evidence from U.S. County Panel Data
A large body of past research, looking across countries, states, and metropolitan areas, has found positive and statistically significant associations between income inequality and mortality. By contrast, in recent years more robust statistical methods using larger and richer data sources have generally pointed to little or no relationship between inequality and mortality. This paper aims both to document how methodological shortcomings tend to positively bias this statistical association and to advance this literature by estimating the inequality-mortality relationship. We use a ...
Home Equity in Retirement
Retired homeowners dissave more slowly than renters, which suggests that homeownership a?ects retirees? saving decisions. We investigate empirically and theoretically the life-cycle patterns of homeownership, housing and nonhousing assets in retirement. Using an estimated structural model of saving and housing decisions, we ?nd, ?rst, that homeowners dissave slowly because they prefer to stay in their house as long as possible but cannot easily borrow against it. Second, the 1996-2006 housing boom signi?cantly increased homeowners? assets. These channels are quantitatively signi?cant; without ...
Equilibrium Labor Market Search and Health Insurance Reform
We present and empirically implement an equilibrium labor market search model where risk averse workers facing medical expenditure shocks are matched with firms making health insurance coverage decisions. Our model delivers a rich set of predictions that can account for a wide variety of phenomenon observed in the data including the correlations among firm sizes, wages, health insurance offering rates, turnover rates and workers? health compositions. We estimate our model by Generalized Method of Moments using a combination of micro datasets including Survey of Income and Program ...
Predicting health behaviors with economic preferences and perceived control
We present new evidence on the relationship between health behaviors and experimental measures of risk and time preferences and introduce evidence that perceived control ? a measure incorporated from the health psychology literature ? is a stronger and more consistent predictor of health behaviors than economic preferences.
Does education improve health? A reexamination of the evidence from compulsory schooling laws
This article analyzes the impact of compulsory schooling laws early in the twentieth century on long-term health. The author finds no compelling evidence for a causal link between education and health using this research design. Further, the results suggest that only a small fraction of health conditions are affected by education, and several of those are conditions, such as sight and hearing, where economic theories don?t appear to be relevant.
Community-based strategies for improving health and well-being
This article looks at two initiatives that are taking a local approach to interweave health promotion and community development efforts. These models utilize community-based strategies to improve health outcomes as well as educational, economic, and social outcomes. The first model is Elev8, a national initiative that integrates a range of health and social services into middle-school sites. The second is the Alameda County Public Health Department?s community based approach to addressing health inequities in low-income communities.