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lecture7_1_26_11_large - LECTURE 7 Economic Epidemiology...

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LECTURE 7: Economic Epidemiology
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•Implicit in much of what we’ve discussed thus far on the demand for health is the idea that the disease environment itself (and interventions that target disease) alter the incentives for people to invest in their health •A major theme of the course is that human behavior drives a big wedge between the efficacy and effectiveness of health interventions (how an intervention works in a laboratory when perfectly administered and with perfect compliance vs. how it works in the ‘real world’) •(1) On the demand side, public health programs may crowd-out or displace costly private protective health behaviors, attenuating the benefits of a public health program •(2) Alternatively, public health programs may also raise the return to private health behaviors, amplifying program benefits •Under what circumstances public health interventions and private health behaviors are substitutes (as in 1) or complements (as in 2) is not well established empirically •(1) May apply to public and private action targeting the same disease, while (2) may apply to actions targeting different diseases (for example)
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•Two papers for today: Philipson survey paper and Oster empirical analysis •As an aside: do doctors working in international health ‘believe’ in economic epidemiology, or are economists just talking to themselves? •From personal experience, I previously didn’t think so, but two pieces of evidence suggests they do: •(1) The sexual behavior of gay men in San Francisco and the advent of combination antiretroviral therapy (ART) •(2) “Risk Compensation: The Achilles’ Heel of Innovations in HIV Prevention,” BMJ 2006 (332): 605-607 •Authors all doctors – no economics paper cited!
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•(1) Tomas Philipson, “Economic Epidemiology and Infectious Diseases” •Major issues explored: •(a) Differences in predictions made by epidemiological models and economic models •(b) Welfare loss caused by infectious disease
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•(a) Differences in predictions made by epidemiological models and economic models •Introduces notion of “prevalence elasticity of demand” for protection against disease •Basic idea is simple: the demand for prevention among the uninfected is a function of disease prevalence •The higher the prevalence, the more likely you are to become infected, so the greater your demand for protection •The lower the prevalence, the less likely you are to become infected, so the less your demand for protection. •Epidemiological models generally include behavior, but they do not allow for behavior to change as a function of disease conditions or prevalence
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•Does this make intuitive sense? Think about extreme examples •Holding cost constant, what’s your demand for protection against the Ebola virus? It’s rather unpleasant to get, so the benefits of protection would be high, but you’re very unlikely to get it - so demand is quite low •What’s your demand for protection against the flu? It’s not so
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