Reading List

ECON 43565 Health Economics

Spring 2013


All files are in PDF format.  Note that some of the articles are scanned copies of book chapters or articles that are not available in electronic format.  As a result, the PDF files are very large.  In some cases, I've broken the files up into two smaller files to ease the download/printer burden.  You must use your netid to access the files.


Articles with a (#) are articles you can use for a précis.



I.          Course Overview

            What is health economics?

(Lecture notes only)


II.        The production of health


a.       Statistics detour – difference-in-difference models (Lecture notes only)


b.      An historical perspective


#McKeown, Thomas, The Role of Medicine: Dream, Mirage or Nemesis, London, England: Nuffield Provincial Hospitals Trust; 1976, pages 29-65.  Chapter 3.  Chapter 4.  (I’ve also included a link to Chapter 8.  You are not required to read it but just look at the graphs in the chapter especially 8.1, 8.5, 8.8-8.10, 8.14). 


#Fogel, Robert, The Escape from Hunger and Premature Death, 1700-2100, Cambridge, UK :Cambridge University Press, 2005, 1-42. 


#Cutler, David and Grant Miller, “The Role of Public Health Improvements in Health Advances:  The Twentieth-Century United States.”  Demography 42(1), 2005, 1-22.


c.       Health and development:  macro and micro perspectives

c1.  Macro studies


Bloom, David E. and David Canning, “The Health and Wealth of Nations,” Science, 2000, 287(5456), 1207-1208.


Sachs, Jeffrey, and Pia Malaney, “The Economic and Social Burden of Malaria,” Nature, 2002, 415(6872), 680-685.


#Acemoglu, Daron, and Simon Johnson, 2007.  "Disease and Development: The Effect of Life Expectancy on Economic Growth," Journal of Political Economy, 115 (6), December, 925-985 (Focus on Pages 925-945).


c2.  Micro studies


#Cutler, David M., Winnie Fung, Michael Kremer, Monica Singhal, and Tom Vogl, 2010.  “Early-life Malaria Exposure and Adult Outcomes: Evidence from Malaria Eradication in India,” American Economic Journal: Applied Economics, 2(2), 72-94.


#Bleakley, Hoyt. 2007. “Disease and Development:  Evidence from Hookworm Eradication in the American South.”  Quarterly Journal of Economics 122(1): 73-117.


d.      Statistics detour – Regression Discontinuity Design


e.       Modern correlates of health


Cutler, David, Angus Deaton, and Adriana Lleras-Muney, 2006. “The Determinants of Mortality.” Journal of Economic Perspectives, 20(3), 97-120.


#Clark, Damon, and Heather Royer. 2014. “The Effect of Education on Adult Mortality and Heath:  Evidence from Britain.”  American Economic Review


#Sullivan, Daniel and Till von Wachter, 2009. “Job Displacement and Mortality: An Analysis Using Administrative Data.” Quarterly Journal of Economics 124(3), 1265-1306.


#Gardner, Jonathan, and Andrew J. Oswald. 2007. “Money and Mental Well-Being:  A Longitudinal Study of Medium-Sized Lottery Winners.”  Journal of Health Economics 27(1), 49-60.


Adler, Nancy E., et al., 1994. “Socioeconomic Status and Health: The Challenge of the Gradient.”  American Psychologist  49(1): 14-24.


Cohen, Sheldon, Denise Janicki-Deverts, Gregory E. Miller. 2007. “Psychological Stress and Disease.” JAMA 298(14): 1685-1687.




III.       The Government control of unhealthy behavior


a.       Pigouvian taxes

Gruber, J., Chapters 5& 6 of Public Finance and Public Policy, 2005, New York:  Worth Publishers.


b.      Do smokers and drinkers pay their way?

Gruber, J, "Tobacco at the Crossroads: The Past and Future of Smoking Regulation in the United States" Journal of Economic Perspectives, 15, 2001, 193-212.


#Manning, WB, EB Keeler, JP Newhouse, EM Sloss, J Wasserman. “The taxes of sin.  Do smokers and drinkers pay their way?JAMA 1989 Mar 17, 261(11):1604-1609.


Viscusi, W. Kip, “How to Value a Life.”, Journal of Economics and Finance, 32(2008): 311-323.


Viscusi, W. Kip, “Value of Life.”  The New Pelgrave Dictionary of Economics Online



a.       Explaining the rise on obesity and can taxes work again?


#Cutler, David, Edward Glaeser and Jesse Shapiro, 2003. “Why Have Americans Become More Obese?”  Journal of Economic Perspectives, 17(3). 93-118.


#Fletcher, Jason M., David Frisvold, and Nathan Teftt. 2010. “The Effect of Soft Drink Taxes on Child and Adolescent Consumption and Weight Outcomes.”  Journal of Public Economics 94(11-12), 967-974.



IV.       Health insurance and the demand for medical care


a.       Choices under uncertainty and the role of insurance


Nicholson, Walter, Microeconomic Theory:  Basic Principles and Extensions, 7th edition, Dryden press, 1998.  Chapters 8 and 10, p 209-259.


b.       Moral hazard


Gladwell, Malcolm, “The Moral Hazard Myth” The New Yorker, August 29, 2005.


#Newhouse, Joseph, Free for All, Cambridge, MA: Harvard University Press, 1993, p. 3-28, 31-49, 338-345.  Part 1.  Part 2.


#Aron-Dine, Aviva, Liran Einav, and Amy Finkelstein. 2013. “The RAND Health Insurance Experiment, Three Decades Later.” Journal of Economic Perspectives 27(1): 197-222.


#Finkelstein, Amy, et al., 2012. “The Oregon Health Insurance Experiment:  Evidence from the First Year.” Quarterly Journal of Economics 127(3), 1057-1106.


#Baicker, Katherine, et al. 2013. “The Oregon Experiment – Effects of Medicaid on Clinical Outcomes.”  New England Journal of Medicine  368(18), 1712-1722.


#Chandra, Amitabh, Jonathan Gruber, and Robin McKnight. 2010. “Patient Cost-Sharing and Hospitalization Offsets in the Elderly,” American Economic Review 100(1), 1-24.


c.       Adverse selection


Rothschild, Michael and Joseph Stiglitz, 1976. “Equilibrium in Competitive Insurance Markets: An Essay on the Economics of Imperfect Information,” Quarterly Journal of Economics,  90(4): 629-650. 


Akerlof, George A., 1970. “The Market for ‘Lemons’: Quality Uncertainty and the Market Mechanism.” Quarterly Journal of Economics, 84(3): 488-500.  Read pages 488-490 only.


#Cutler, David M., and Sarah J. Reber, “Paying for Health Insurance: The Tradeoff Between Competition and Adverse Selection,” Quarterly Journal of Economics, 113(2), pp. 433-466.


#Simon, Kosali, “Adverse Selection in Health Insurance Markets?  Evidence from State Small-Group Health Insurance Reforms,” Journal of Public Economics, 89, 2005, 1865-1877.



b.      Employer-provided health insurance


For this section, it might be useful for you to review your class notes from intermediate micro economics on income and substitution effects.



Smith, Jessica, and Carla Madalia. 2013. Health Insurance Coverage in the United States: 2013, U.S. Census Bureau, Washington, DC.

Please look over this document and come to class with five interesting facts about the uninsured.


Blumenthal, David. 2006. “Employer-Sponsored Health Insurance in the United States – Origins and Implications.”  New England Journal of Medicine 355: 82-88.


Shiels, J., Haught, R., “The Cost of Tax-Exempt Health Benefits in 2004,” Health Affairs, Web exclusive, February 24, 2004.


Reinhardt, Uwe, 1999. “Employer-Based Health Insurance: A Balance Sheet,” Health Affairs, 18(6), 124-132.


c.       The health benefits of insurance coverage


#Card , David, Carlos Dobkin, Nicole Maestas, 2009. “Does Medicare Save Lives?” Quarterly Journal of Economics, 124(2), 597-636.


#Finkelstein, Amy, Robin McKnight. 2008. “What Did Medicare Do?  The Initial Impact of Medicare on Mortality and out of Pocket Spending.” Journal of Public Economics, 92 (2008), 1644-1668. (only read though page 1653).


#Doyle, Joseph J. Jr. 2005. “Health insurance, Treatment and Outcomes: Using Auto Accidents as Health Shocks.” Review of Economics and Statistics  87(2), 256-270.



            f.          How health insurance interacts with the job market


Summers, Lawrence, 1989. “Some Simple Economics of Mandated Benefits,” American Economic Review, May 177-183.


Krueger, Alan, and Uwe Reinhart, “The Economics of Employer versus Individual Mandates,” Health Affairs, Spring (II) 1994, 34-53.


#Gruber, J., 1994. “The Incidence of Mandated Maternity Benefits,” American Economic Review, 84(3), 622.641.


#Cutler, David, Jonathan Gruber, 1996. "Does Public Insurance Crowd Out Private Insurance," Quarterly Journal of Economics, 111, 391-430.


#Gruber, Jonathan, and Kosali Simon. 2008. “Crowd-Out 10 Years Later: Have Recent Public Insurance Expansions Crowded Out Private Health Insurance.”  Journal of Health Economics 27(2), 201-217.



V.         Medical technology and health care costs


Newhouse, Joseph, “Medical Care Costs: How Much Welfare Loss?” Journal of Economic Perspectives, 6(3), 1992, 3-31.


Pauly, Mark. “Should We Be Worried About High Real Medical Spending Growth in the US?” Health Affairs, Web Exclusive, Jan 8, 2003, w3-15.


#Cutler, D., M. McClellan, “Is Technological Change in Medicine Worth It?”  Health Affairs, 20(5), 2001, 11-29.


#Cutler, David, Allison B. Rosen, and Sandeep Vijan, 2006. “Value of Medical Innovation in the United States: 1960-2000,” New England Journal of Medicine, 355(9), 920-927.



VI.       Physician Behavior


Please check out the Dartmouth Atlas, which is a fascinating graphical presentation of small-area variation.  If you do not waste 3 hours looking at these graphs, you are not interested in health economics.


#Gruber, Jonathan and Maria Owings, 1996. “Physician Incentives and Cesarean Section Delivery,” RAND Journal of Economics, 27(1), 99-123.


Fisher, Elliott S., et al., “The Implications of Regional Variations in Medicare Spending. Part 1: The Content, Quality, and Accessibility of Care,” Annals of Internal Medicine, 138(4), February 18, 2003, pp. 273-287.

Fisher, Elliott S., et al., “The Implications of Regional Variations in Medicare Spending. Part 2: Health Outcomes and Satisfaction with Care,” Annals of Internal Medicine, 138(4), February 18, 2003, pp. 288-298.


#Hillman, B.J., et al., “Frequency and Costs of Diagnostic Imaging in Office Practices—A comparison of Self-Referring and Radiologist Referring Physicians,” New England Journal of Medicine, 323, December 6, 1990, 1604-1608.


#Doyle, Joseph, John Graces, Jonathan Gruber, and Samuel Kleiner. Forthcoming. “Measuring Returns to Hospital Care:  Evidence from Ambulance Referral Patterns.”  Journal of Political Economy



VII.      Hospitals


#Cutler, D., 1995. "The Incidence of Adverse Medical Outcomes under Prospective Payment," Econometrica, 63, 1995, 29-50.  Please read pages 29-33.


Rogers, William H., et al. 1990. “Quality of Care Before and After Implementation of the DRG-Based Prospective Payment System:  A Summary of Effects,” JAMA, 264(15), October 17, 1990, 1989-1994.


#Dafny, L., 2005. “How do Hospitals Respond to Price Changes,” American Economic Review, 95(5), December 2005, 1525-1547.