Health economics

Michael Kremer, Christopher Snyder, Natalia Drozdoff, 29 January 2016

Many observers believe that pharmaceutical firms prefer to invest in drugs to treat diseases rather than vaccines. This column presents an economic rationale for why such a pattern may emerge for diseases like HIV/AIDS. The population risk of such diseases resembles a Zipf distribution, which makes the shape of the demand curve for a drug more conducive to revenue extraction than for a vaccine. Based on revenue calibrations using US data on HIV risk, the revenue from a drug is about four times greater.

Resul Cesur, Pınar Mine Güneş, Erdal Tekin, Aydogan Ulker, 18 January 2016

The goal of universal health coverage has been pursued by countries in a number of ways, most notably through demand-side policies. In 2005, Turkey extended basic healthcare services to its entire population under a free-of-charge, centrally administered system. This column examines the impact of this supply-side programme on mortality and birth rates. Results show that the program was successful in lowering both mortality and birth rates across provinces, particularly for the most vulnerable populations. These findings provide compelling evidence in favour of providing accessible healthcare services to all citizens.

Janet Currie, 15 January 2016

Studies of the effects of economic fluctuations on health have come to wildly different conclusions. This may be because the effects are different for different groups. Using US data, this column looks at the health consequences of the Great Recession on mothers, a sub-population that has thus far been largely neglected in the literature. Increases in unemployment are found to have large negative health effects and to increase incidences of smoking and substance abuse among mothers. These effects appear to be concentrated on disadvantaged groups such as minorities, and point to short- and long-term consequences for their children.

Asha Abdel-Rahim, Dany Jaimovich, Aleksi Ylönen, 13 December 2015

One of the most important effects of armed conflicts is the forced displacement of large numbers of civilians. When conflicts end, many who have left their homes return, facing the challenge of rebuilding their lives in post-conflict areas. This column analyses the outcomes of returning households during a short-lived interwar period in the Nuba Mountains of Sudan. Returning households, particularly those that are female-headed, face worse economic conditions. But returnees fare better on various health indicators, likely related to changes in sanitary habits picked up during displacement.

Christopher J. Ruhm, 29 October 2015

Conventional wisdom tells us that health deteriorates when the economy weakens and improves when it strengthens. Some research tentatively agrees, but there is a marked dearth of challenges and robust research. This column presents new evidence suggesting that the reductions in mortality occurring during typical economic downturns also occur in periods of crisis, adding useful caveats for different types of downturns and crises.

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