Essay About Health Economics


This dissertation examines the linkages between public policy, environment and human health. The first chapter evaluates the environmental impact of the world’s largest Low Emission Zone (LEZ) in London. The second chapter reviews recent literature in assessing the health effects of air pollution, and at the same time, provides a national scale estimation on the impacts of four “criteria air pollutants” on fetal health using natality data in the United States from 1991 to 2008. The third chapter explores fetal sensitivity to different air pollution thresholds and analyzes the heterogeneous effects of air pollution across socioeconomic groups. Chapter one concerns the environmental impact of the world’s largest LEZ introduced in London in early 2008. The LEZ policy restricts heavily polluting diesel vehicles from entering Greater London by charging 100 to 200 euros per day. The empirical estimation relies on a difference-in-differences (DID) method that compares the air pollution concentrations before and after the introduction of the LEZ. Using daily level particulate matter (PM10) and nitrogen dioxide (NO2) data, I find that the initial phase of London’s LEZ does not lead to substantially reduced air pollution inside London. The subsequent phases, on the other hand, generate an 8 to 13 percent reduction of air pollution. A further spatial analysis shows that a majority of this air pollution reduction occurs in industrial instead of roadside areas. Combining data from traffic sectors, I provide evidence that the insignificant DID estimator in the initial phase is partially caused by the positive spillover effects nearby and far from Greater London. I supplement this result with evidence showing that drivers may substitute toward a non-subject vehicle to avoid paying the LEZ fee inside the zone. Chapter two provides a thorough literature review on the health impact of direct and indirect exposures to air pollution. The reviewed articles span the fields of epidemiology, environmental health, medical science and economics. For each reviewed article, I discuss in detail the identification strategies, which include quasi-experimental design, instrumental variables approach and difference-in-differences method. The estimation results, however, show some degree of inconsistency. Motivated by the literature gap, the rest of Chapter 2 performs a comprehensive analysis on the health effect of maternal exposure to air pollution using data from over 20 million births in the United States from 1991 to 2008. For the four “criteria air pollutants” studied, carbon monoxide imposes the greatest health risk on fetuses during the first and third trimesters. Nitrogen dioxide, ozone and sulfur dioxide each shows some adverse effects on birth outcome, but their impacts are weaker than those of carbon monoxide. In addition, I find that maternal avoidance behaviors against air pollution may largely reduce the health risks of air pollution, especially for pre-term babies during the second trimester. Chapter three constructs an innovative pollution index to empirically investigate whether there exists a “safety threshold” of air pollution. The econometric model is constructed based on the traditional approach but has an important revision on the key regressor. Specifically, a series of hypothetical “safety thresholds” are tested against the assumption that only pollution ranging above the threshold will convey explanatory power on health outcomes. The model is estimated using individual-level birth data in the U.S. from 1991 to 2008. Among the four pollutants analyzed, carbon monoxide imposes significant health risks even if its concentration approaches zero, whereas nitrogen dioxide, ozone and sulfur dioxide do not affect fetal health conditions unless their concentrations rise above certain thresholds. According to my estimation, the thresholds that generate the most sensitive changes of fetal birth weight are about 15.30 ppb for nitrogen dioxide, 0.029 ppm for ozone and 13.4 ppb for sulfur dioxide, all at the weekly average level. Meanwhile, the analysis also implies the existence of heterogeneity in the responsiveness to air pollution across different socioeconomic groups. In particular, smoking mothers giving subsequent births are found to be at high risk of environmental hazards.


Essays on Health Economics

Wilfredo Alorro Lim

Essays on Health Economics
Lim, Wilfredo Alorro
Thesis Advisor(s):
Almond, Douglas V.
Ph.D., Columbia University
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This dissertation consists of three essays on health economics. The first chapter provides empirical evidence on the impacts of government reimbursement of long-term care. We apply a regression discontinuity design using administrative data from South Korea to estimate the impact of subsidies for formal home and institutional care on informal care use and medical expenditures. We find that reimbursement leads to increases in formal long-term care utilization, even accounting for crowd out of private spending. Among individuals who are partially dependent for some activities of daily living (ADLs), we find that increased use of formal home care has no impact on the use of informal care at the extensive margin or on medical expenses. Among individuals who are partially dependent for several ADLs, we find that increased use of institutional care leads to reductions in informal care and medical expenses. Among individuals who are completely dependent for several ADLs, we find that substitution of home care for institutional care leads to substantial decreases in medical spending. The second chapter studies state laws passed in the late 1990s that required health insurers to cover diabetes related equipment, supplies, and education. We assess the impact of these mandates on health related behavior and labor market outcomes. We find no significant effects for diabetics or groups with higher prevalence of diabetes in terms of exercise, diet, income, or employment. These results are robust to different specifications and datasets. The third chapter provides empirical evidence on both outcomes and potential mechanisms resulting from information obtained from screening. We apply a regression discontinuity design using administrative data from South Korea to estimate the impact of different classifications of overall health that vary discontinuously with blood sugar level. We find that secondary examinations due to a "disease suspected" classification leads to follow-up rates greater than 50%. However, we find few impacts otherwise, including short and medium run medical activity and longer run health outcomes. We also find that the responsiveness to the classifications among the highest income quintiles is lower than among the other quintiles, consistent with more educated individuals incorporating information directly from the blood sugar measure itself.
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Suggested Citation:
Wilfredo Alorro Lim, 2012, Essays on Health Economics, Columbia University Academic Commons,

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