Essays on the empirical modelling of the determinants of health and lifestyle

The thesis comprises two essays in health economics.

The first examines the impact of health insurance on lifestyle. The ex ante moral hazard (EAMH) postulates that health insurance reduces prevention effort (healthy lifestyle) since the cost of ill health to the insured individual is reduced. There is little evidence to support this hypothesis. I extend the standard model of EAMH by allowing for the fact that the consequences of a more healthy current lifestyle take some time to affect health. This extended model predicts that anticipated future insurance can alter current behaviour. I test this prediction by using as a natural experiment the granting of Medicare at age 65 to all individuals, including the large proportion who have no insurance when under age 65. I first use classical parametric and semi-parametric empirical methods. Then, these methods are combined into a more robust estimator to compare the changes in lifestyle between ages 59 and 68 for individuals with different amounts of insurance before age 65. The results suggest reductions in physical activity by the uninsured two years before being covered by Medicare. Anticipation of Medicare has no effect on alcohol consumption or smoking behaviour.

The second essay investigates the role of maternal parenting style on child health. The analysis is innovative in using econometric methods that allow for possible biases arising from unobservable family circumstances and from parenting style being influenced also by child health. Using two waves from the Millennium Cohort Study I also develop a set of measures of parenting style and allow for potential reporting bias and for the role of the father. I find that maternal parenting style mainly influences the mental health of the child, rather than the physical health. Parenting style and socio-economic factors do not appear to interact in their effect on child health.