Health Economics

Paper Session

Saturday, Jan. 7, 2017 8:00 AM – 10:00 AM

Hyatt Regency Chicago, Atlanta
Hosted By: American Economic Association
  • Chair: Sanjeev Kumar, Yale University

Do Kidney Exchanges Improve Patient Outcomes? An Analysis of Crowd-Out, Graft Survival, and Match Quality

Keith Teltser
University of Louisville


Addressing the increasingly unmet demand for transplantable kidneys in the U.S. requires creativity due to legislation that prohibits buying and selling organs. In order to increase the number of successful transplants that take place, economists, computer scientists, and transplant professionals have begun collaborating to implement kidney exchange programs where patients can “swap” their willing but incompatible living donors. In this paper, I first estimate the number of additional transplants generated by kidney exchanges by analyzing how the probability of receiving an exchange transplant affects the probability that a patient experiences other transplant outcomes, including death while waiting. To do this, I create a novel measure of exchange prevalence that exploits variation in exchange activity across time and transplant centers, as well as the importance of patient proximity to centers performing exchanges. I find that 6.2 of every 10 exchange transplants represent living donor transplants that would not have occurred in the absence of exchange. Using the same approach, I find a small negative but insignificant effect on tissue type match quality. However, I also find that a ten percentage point increase in the probability of receiving an exchange transplant has a small but statistically significant positive effect on graft survival, and reduces waiting time by almost 2 months (10 percent). Back-of-the-envelope calculations based on these findings and prior research suggest that, on average, every 10 exchange transplants reduce health care costs by $715,000 to $1.15 million and increase net social welfare by $2.8 to $6.8 million.

Does Health Influence Risk Preference?

Sanjeev Kumar
Yale University


In this paper, we investigate whether self-assessed health (SAH) status—a measure of health stock—influences the risk preference of an individual. Using the National Longitudinal Study of Adolescent Health (Add Health), we estimate that better health during adolescence is associated with more willingness to take risks when people are around age 30. Moreover, the experience of a reduction in their health stock between adolescence and young adulthood is even more strongly associated with willingness to take risk later in their lives—a finding that provides a novel pathway through which individual’s loss aversion gets operationalized. These findings are robust to regression specifications—linear probability and generalized ordered logistic regression models—as well as to the inclusion of exogenous personal characteristics, such as age, gender, height, and race—variables that are shown to be related to both health and various measures of risk in the existing literature. We further investigate the robustness of the main findings through the inclusion of school fixed effects, parental background, religiosity, income, education, cognitive ability. Controlling for these covariates allows us to explore the existence of a direct, independent relationship between health and risk preference. Our findings remained robust even after including two heritable measures of personality—neuroticism and conscientiousness—that could have bearing on both health and risk preference. This is the first paper that has uncovered a long-term association of health with risk-taking. These findings are quite pertinent in building a better understanding of the processes that govern deepening of the market mechanism and the processes leading to policy formation. If similar findings hold for older populations, then it potentially establishes a link between health and the future of financial markets and the pace of change in policy regimes.

The Pros and Cons of Sick Pay Schemes: Testing for Contagious Presenteeism and Shirking Behavior

Nicolas Robert Ziebarth
Cornell University
Stefan Pichler
ETH Zurich


This paper proposes a test for the existence and degree of contagious presenteeism and negative externalities in sickness insurance schemes. First, we theoretically decompose moral hazard into shirking and contagious presenteeism behavior and derive testable conditions. Then, we implement the test exploiting German sick pay reforms and administrative industry-level data on certified sick leave by diagnoses. The labor supply adjustment for contagious diseases is significantly smaller than for noncontagious diseases. Lastly, using Google Flu data and the staggered implementation of U.S. sick leave reforms, we show that flu rates decrease after employees gain access to paid sick leave.
JEL Classifications
  • I1 - Health