Evidence-based Economic Policy - Three Essays in Applied Microeconometrics

Over thirty years ago, Leamer (1983) - among many others - expressed doubts about the quality and usefulness of empirical analyses for the economic profession by stating that "hardly anyone takes data analyses seriously. Or perhaps more accurately, hardly anyone takes anyone else's data analyses seriously" (p.37). Improvements in data quality, more robust estimation methods and the evolution of better research designs seem to make that assertion no longer justifiable (see Angrist and Pischke (2010) for a recent response to Leamer's essay). The economic profes- sion and policy makers alike often rely on empirical evidence as a means to investigate policy relevant questions. The approach of using scientifically rigorous and systematic evidence to identify policies and programs that are capable of improving policy-relevant outcomes is known under the increasingly popular notion of evidence-based policy. Evidence-based economic policy often relies on randomized or quasi-natural experiments in order to identify causal effects of policies. These can require relatively strong assumptions or raise concerns of external validity. In the context of this thesis, potential concerns are for example endogeneity of policy reforms with respect to the business cycle in the first chapter, the trade-off between precision and bias in the regression-discontinuity setting in chapter 2 or non-representativeness of the sample due to self-selection in chapter 3. While the identification strategies are very useful to gain insights into the causal effects of specific policy questions, transforming the evidence into concrete policy conclusions can be challenging. Policy develop- ment should therefore rely on the systematic evidence of a whole body of research on a specific policy question rather than on a single analysis. In this sense, this thesis cannot and should not be viewed as a comprehensive analysis of specific policy issues but rather as a first step towards a better understanding of certain aspects of a policy question. The thesis applies new and innovative identification strategies to policy-relevant and topical questions in the fields of labor economics and behavioral environmental economics. Each chapter relies on a different identification strategy. In the first chapter, we employ a difference- in-differences approach to exploit the quasi-experimental change in the entitlement of the max- imum unemployment benefit duration to identify the medium-run effects of reduced benefit durations on post-unemployment outcomes. Shortening benefit duration carries a double- dividend: It generates fiscal benefits without deteriorating the quality of job-matches. On the contrary, shortened benefit durations improve medium-run earnings and employment possibly through containing the negative effects of skill depreciation or stigmatization. While the first chapter provides only indirect evidence on the underlying behavioral channels, in the second chapter I develop a novel approach that allows to learn about the relative impor- tance of the two key margins of job search - reservation wage choice and search effort. In the framework of a standard non-stationary job search model, I show how the exit rate from un- employment can be decomposed in a way that is informative on reservation wage movements over the unemployment spell. The empirical analysis relies on a sharp discontinuity in unem- ployment benefit entitlement, which can be exploited in a regression-discontinuity approach to identify the effects of extended benefit durations on unemployment and survivor functions. I find evidence that calls for an important role of reservation wage choices for job search be- havior. This can have direct implications for the optimal design of unemployment insurance policies. The third chapter - while thematically detached from the other chapters - addresses one of the major policy challenges of the 21st century: climate change and resource consumption. Many governments have recently put energy efficiency on top of their agendas. While pricing instru- ments aimed at regulating the energy demand have often been found to be short-lived and difficult to enforce politically, the focus of energy conservation programs has shifted towards behavioral approaches - such as provision of information or social norm feedback. The third chapter describes a randomized controlled field experiment in which we discuss the effective- ness of different types of feedback on residential electricity consumption. We find that detailed and real-time feedback caused persistent electricity reductions on the order of 3 to 5 % of daily electricity consumption. Also social norm information can generate substantial electricity sav- ings when designed appropriately. The findings suggest that behavioral approaches constitute effective and relatively cheap way of improving residential energy-efficiency.

Forgoing dental care for economic reasons in Switzerland: a six-year cross-sectional population-based study

BACKGROUND: While oral health is part of general health and well-being, oral health disparities nevertheless persist. Potential mechanisms include socioeconomic factors that may influence access to dental care in the absence of universal dental care insurance coverage. We investigated the evolution, prevalence and determinants (including socioeconomic) of forgoing of dental care for economic reasons in a Swiss region, over the course of six years. METHODS: Repeated population-based surveys (2007-2012) of a representative sample of the adult population of the Canton of Geneva, Switzerland. Forgone dental care, socioeconomic and insurance status, marital status, and presence of dependent children were assessed using standardized methods. RESULTS: A total of 4313 subjects were included, 10.6% (457/4313) of whom reported having forgone dental care for economic reasons in the previous 12 months. The crude percentage varied from 2.4% in the wealthiest group (monthly income ≥ 13,000 CHF, 1 CHF ≈ 1$) to 23.5% among participants with the lowest income (<3,000 CHF). Since 2007/8, forgoing dental care remained stable overall, but in subjects with a monthly income of <3,000 CHF, the adjusted percentage increased from 16.3% in 2007/8 to 20.6% in 2012 (P trend = 0.002). Forgoing dental care for economic reasons was independently associated with lower income, younger age, female gender, current smoking, having dependent children, divorced status and not living with a partner, not having a supplementary health insurance, and receipt of a health insurance premium cost-subsidy. CONCLUSIONS: In a Swiss region without universal dental care insurance coverage, prevalence of forgoing dental care for economic reasons was high and highly dependent on income. Efforts should be made to prevent high-risk populations from forgoing dental care.

The potential impact of new effervescent alendronate formulation on compliance and persistence in osteoporosis treatment.

Osteoporotic fractures are a public health problem and their incidence and subsequent economic and social costs are expected to rise in the next future. Different drugs have been developed to reduce osteoporosis and the risk of osteoporotic fractures, and among them, antiresorptive agents, and in particular oral alendronate, are the most widely utilized. However, one of the most common problems with antiresorptive drugs is poor adherence to treatment, which is associated with a high fracture incidence and with an increase in hospitalization costs. One of the main reasons of poor adherence to these treatments is the occurrence of adverse events, mainly at gastrointestinal (GI) level, including dyspepsia, dysphagia, and esophageal ulcers. In light of these considerations the aim of this paper is to perform a literature review to show the pathophysiologic bases of GI alendronate-induced adverse events and how new bisphosphonate formulations like effervescent alendronate can improve compliance and persistence to treatment and decrease the fracture rate incidence in osteoporotic patients.

Potential health-care service utilization substitution effects induced by case management for emergency department frequent users

BACKGROUND: In most of the emergency departments (ED) in developed countries, a subset of patients visits the ED frequently. Despite their small numbers, these patients are the source of a disproportionally high number of all ED visits, and use a significant proportion of healthcare resources. They place a heavy economic burden on hospital and healthcare systems budgets overall. Several interventions have been carried out to improve the management of these ED frequent users. Case management has been shown in some North American studies to reduce ED utilization and costs. In these studies, cost analyses have been carried out from the hospital perspective without examining the costs induced by healthcare consumed in the community. However, case management might reduce ED visits and costs from the hospital's perspective, but induce substitution effects, and increase health service utilization outside the hospital. This study examined if an interdisciplinary case-management intervention-compared to standard ED care -reduced costs generated by frequent ED users not only from the hospital perspective, but also from the healthcare system perspective-that is, from a broader perspective taking into account the costs of healthcare services used outside the hospital. METHODS: In this randomized controlled trial, 250 adult frequent emergency department users (5 or more visits during the previous 12 months) who visited the ED of the University Hospital of Lausanne, Switzerland, between May 2012 and July 2013 were allocated to one of two groups: case management intervention (CM) or standard ED care (SC), and followed up for 12 months. Depending on the perspective of the analysis, costs were evaluated differently. For the analysis from the hospital's perspective, the true value of resources used to provide services was used as a cost estimate. These data were obtained from the hospital's analytical accounting system. For the analysis from the health-care system perspective, all health-care services consumed by users and charged were used as an estimate of costs. These data were obtained from health insurance providers for a subsample of participants. To allow comparisons in a same time period, individual monthly average costs were calculated. Multivariate linear models including a fixed effect "group" were run using socio-demographic characteristics and health-related variables as controlling variables (age, gender, educational level, citizenship, marital status, somatic and mental health problems, and risk behaviors).

Eligibility to treatment and economic effect of the implementation of the new U.S. or European Society of Hypertension/European Society of Cardiology hypertension guidelines.

OBJECTIVE: To evaluate the population and economic impact of implementing the new Joint National Committee (JNC) or European Society of Hypertension (ESH)/European Society of Cardiology (ESC) hypertension guidelines in the Swiss population. METHODS: Cross-sectional, population-based sample (6708 participants) collected between 2003 and 2006 in the city of Lausanne, Switzerland. Blood pressure categories were defined according to both the JNC (JNC-7 and JNC-8) and the ESH/ESC (2007 and 2013) guidelines. RESULTS: The proportion of participants aged 35-60 years eligible for drug treatment was 25.6% [95% confidence interval (CI) 24.4-26.9%] and 24.8% (95% CI 23.6-26.0%) for the JNC-7 and the JNC-8 guidelines, respectively; for participants aged 60-75 years, the values were 62.3% (95% CI 60.1-64.5%) and 46.8% (95% CI 44.5-49.0%), respectively. Shifting from the JNC-7 to the JNC-8 guidelines would lead to an annual saving of 163.6 million Swiss francs (187.7 million US dollars or 134.5 million European euro). The proportion of participants aged 35-75 years without chronic kidney disease, diabetes mellitus or reported history of cardiovascular disease and eligible for treatment was 30.2% (95% CI 29.0-31.4%) for the ESH/ESC 2007 and 2013 guidelines. For participants with chronic kidney disease, diabetes mellitus or reported history of cardiovascular disease, the values were 73.6% (95% CI 70.8-76.3%) and 55.6% (95% CI 52.5-58.8%), respectively. Shifting from the ESH/ESC 2007 to the ESH/ESC 2013 guidelines would lead to an annual saving of 86.9 million Swiss francs (99.5 million US dollars or 71.4 million European euro). CONCLUSION: In Switzerland, shifting from the JNC-7 to the JNC-8 guidelines or from the ESH/ESC 2007 to the ESH/ESC 2013 guidelines would decrease the prevalence of patients eligible for treatment and increase the percentage of treated patients within blood pressure goals. Both strategies lead to potential savings in antihypertensive drug treatment.

Medical nutrition in oncology : potential solution for managing malnutrition in cancer patients in Switzerland

The objective of this study is to: - Describe the cancer related complications, prevalence and economic burden of cancer; - Provide the review of the studies that have been done until now proving that specialized nutrition; can improve quality of life (QoL), shorten the length of hospital stay and reduce overall cost of patients care; - Describe different types of specialized nutritional support and tools/ guidelines used for nutritional screening; - Justify the use of specialized nutrition as an integral part of cancer treatment [Author, p. 6] [Contents] 3. General overview of cancer. 4. Specialized nutritional support and nutritional screening. 4.4 European guidelines for nutritional screening [Screening tools: Malnutrition Universal Screening Tool (MUST); Nutritional Risk Screening (NRS-2002); Mini Nutritional Assessment (MNA)]. 5. Implementation of nutritional support in Swiss hospitals as an integral part of oncology treatment. 5.1 Nutritional guidelines used in Switzerland. 5.2 Status of prevention of malnutrition in cancer patients in Swiss hospitals. 5.3 Malnutrition in Swiss hospitals: medical costs and potential economies. 5.4 Recommendations for implementation of nutritional guidelines and nutritional support in Swiss hospitals.