Health Economics
14th Edition
ISBN: 9781137029966
Author: Jay Bhattacharya
Publisher: SPRINGER NATURE CUSTOMER SERVICE
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Chapter 6, Problem 8E
To determine
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Indicate whether the statement is true or false, and justify your answer.The phenomenon of herd immunity makes disease eradication difficult because it ensures that diseases will survive until vaccination rates reach 100%.
Indicate whether the statement is true or false, and justify your answer.Most economists believe that the smallpox eradication campaign was not costeffective because it required so many upfront costs and smallpox was already eliminated in much of the developed world.
Indicate whether the statement is true or false, and justify your answer.In employer-sponsored health insurance in the US, employers pay the largest share of the costs of health insurance.
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- Indicate whether the statement is true or false, and justify your answer.People who drop out of high school are able to produce more health than college graduates because they have more free time to invest in health production.arrow_forwardIndicate whether the statement is true, false, or unclear, and justify your answer.The fact that more free-plan participants logged ER visits for broken bones than costsharing plan participants in the RAND Health Insurance Experiment is evidence of moral hazard.arrow_forwardIndicate whether the statement is true or false, and justify your answer.The RAND HIE found that people assigned to the free health plan had the same rate of hospitalization as people assigned to the cost-sharing plans.arrow_forward
- Indicate whether the statement is true or false, and justify your answer.The number of US medical schools decreased drastically between 1900 and 1950.arrow_forwardIndicate whether the statement is true or false, and justify your answer.At firms that do not provide health insurance, the wages of obese workers are lower than the wages of non-obese workers with similar levels of productivity.arrow_forwardIndicate whether the statement is true or false, and justify your answer.In a study of babies born during the Dutch famine toward the end of World War II, those exposed to the famine in utero were more likely than those not as exposed to be obese as adults.arrow_forward
- Indicate whether each statement is true or false, and justify your answer.If a government wishes to maximize the rate of pharmaceutical innovation, it should offer non-expiring patents to drug companies.arrow_forwardIndicate whether the statement is true, false, or unclear, and justify your answer.Besides the common practice of charging copayments, health insurers have no successful strategies for combating moral hazard.arrow_forwardIndicate whether the statement is true or false, and justify your answer.In the US, well-educated males can expect to live longer than poorly educated males.arrow_forward
- Indicate whether the statement is true or false, and justify your answer.Medical arms races, since they are a form of private competition, lead to socially optimal levels of technology acquisition by hospitals.arrow_forwardConsider the following abstract from the following research paper “Do Social Connections Reduce Moral Hazard? Evidence from the New York City Taxi Industry” by C. Kirabo Jackson and Henry Schneider: “This study investigates the role of social networks in aligning the incentives of agents in settings with incomplete contracts. Specifically, the study examines the New York City taxi industry where taxis are often leased and lessee-drivers have worse driving outcomes [like gas overuse and accidents] than owner-drivers due to moral hazard… We find that drivers leasing from members of their country-of-birth community exhibit significantly reduced effects of moral hazard, representing an improvement… of the outcome measures.” 1. Thinking of moral hazard, draw an analogy between the taxi leasing industry and health insurance. Specifically, briefly highlight the following aspects Price distortion effects Behaviour change due to price sensitivity Information asymmetry Social loss 2. The paper…arrow_forwardIndicate whether each statement is true or false, and justify your answer.The Food and Drug Administration (FDA) decides whether to approve a drug for use in the US based in part on whether each drug is cost-effective in the treatment of some disease.arrow_forward
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