Healthy, Wealthy, and Wise? Healthy, Wealthy, and Wise? The Causal - PowerPoint PPT Presentation

Healthy, Wealthy, and Wise? Healthy, Wealthy, and Wise? The Causal Pathways between The Causal Pathways between Health and Socioeconomic Status Health and Socioeconomic Status Daniel McFadden Daniel McFadden University of California, Berkeley, and NBER University of California, Berkeley, and NBER June 2003 June 2003 Research sponsored by National Institute on Aging Research sponsored by National Institute on Aging Behavioral and Social Research Behavioral and Social Research Richard Suzman Suzman, Director , Director Richard

The links between health, wealth The links between health, wealth Higher socio- -economic status (SES) is economic status (SES) is Higher socio associated with better health and associated with better health and longer life longer life The association is found in different The association is found in different eras, places, genders, and ages eras, places, genders, and ages

The association holds for: The association holds for: – A variety of health variables (most A variety of health variables (most – illnesses, mortality, self- -rated health rated health illnesses, mortality, self status, psychological well- -being, and being, and status, psychological well biomarkers such as allostatic allostatic load) load) biomarkers such as – Alternative measures of SES (wealth, Alternative measures of SES (wealth, – education, occupation, income, level education, occupation, income, level of social integration). of social integration).

Prevalence Relative Risk Prevalence Relative Risk Low vs vs High SES, AHEAD 1993 High SES, AHEAD 1993 Low Condition F M Condition F M Condition F M Condition F M Cancer 0.52 1.03 Incontinent 1.15 1.29 Cancer 0.52 1.03 Incontinent 1.15 1.29 Heart 2.15* 1.35* Hip Fract Fract. . 1.68 2.31 Heart 2.15* 1.35* Hip 1.68 2.31 Stroke 1.44 2.46* Cog. Imp. 1.82* 6.97* Stroke 1.44 2.46* Cog. Imp. 1.82* 6.97* Lung 3.18* 2.38* Psychiatric 0.86 1.78 Lung 3.18* 2.38* Psychiatric 0.86 1.78 Diabetes 5.25* 1.64 Depression 2.78* 5.33* Diabetes 5.25* 1.64 Depression 2.78* 5.33* HBP 1.21* 1.58* Smoker 4.67* 4.27* HBP 1.21* 1.58* Smoker 4.67* 4.27* Arthritis 1.31* 1.63* P/F SRHS 3.09* 2.69* Arthritis 1.31* 1.63* P/F SRHS 3.09* 2.69*

The association must be rooted in The association must be rooted in fundamental heterogeneities of nature fundamental heterogeneities of nature and nurture in human populations and nurture in human populations It is not not explained solely by: explained solely by: It is Poverty Poverty Social discrimination Social discrimination Availability of medical technology Availability of medical technology Specific systems for delivery and Specific systems for delivery and financing of health care financing of health care

Sources: Sources: P. Adams, M. Hurd Hurd, D. McFadden, A. Merrill, T. , D. McFadden, A. Merrill, T. Ribeiro Ribeiro P. Adams, M. (2003) "Healthy, Wealthy, and Wise? Tests for Direct (2003) "Healthy, Wealthy, and Wise? Tests for Direct Causal Paths between Health and Socioeconomic Causal Paths between Health and Socioeconomic Status," Journal of Econometrics, 112, 3 . Status," Journal of Econometrics, 112, 3- -56 56 . ----------- (2003) “Addendum”, forthcoming in D.Wise (2003) “Addendum”, forthcoming in D.Wise ----------- (ed) Research in the Economics of Aging , NBER. (ed) Research in the Economics of Aging , NBER. J. Adda Adda, T. , T. Chandola Chandola, M. Marmot (2003) “Socio , M. Marmot (2003) “Socio- - J. economic Status and Health: Causality and Pathways,” economic Status and Health: Causality and Pathways,” Journal of Econometrics, 112, 57- -63. 63. Journal of Econometrics, 112, 57 A. Case, A. Deaton (2003) "Broken Down by Work and A. Case, A. Deaton (2003) "Broken Down by Work and Sex: How Our Health Declines,“ Carefree Conference on Sex: How Our Health Declines,“ Carefree Conference on the Economics of Aging, Princeton/NBER working the Economics of Aging, Princeton/NBER working paper. paper. J. Smith (2003) “Consequences and Predictors of New J. Smith (2003) “Consequences and Predictors of New Health Events,” Carefree Conference on the Economics Health Events,” Carefree Conference on the Economics of Aging, RAND/NBER working paper. of Aging, RAND/NBER working paper.

TASTES/BEHAVIOR GENETICS SES HISTORY HEALTH HISTORY HEALTH EVENTS SES EVENTS

HEALTH HISTORY ONSET OF NEW HEALTH CONDITION SES HISTORY DIAGNOSIS BEHAVIOR TREATMENT REGIMEN CURE CONTROL DEATH NEW SES MEDICAL, DRUG, CAREGIVER COSTS, LOST INCOME

Policy Implications Policy Implications Research interest in the health- -wealth nexus is wealth nexus is Research interest in the health fueled by the potential policy implications of fueled by the potential policy implications of alternative causal paths. alternative causal paths. If the poor are less healthy because of specific If the poor are less healthy because of specific failures in the health care delivery system, failures in the health care delivery system, targeted changes in that system could have a targeted changes in that system could have a significant net social benefit. significant net social benefit. If the poor are less healthy because of behavior If the poor are less healthy because of behavior that increases risk, delays diagnosis, or reduces that increases risk, delays diagnosis, or reduces the effectiveness of treatment, then policies that the effectiveness of treatment, then policies that increase information and encourage protective increase information and encourage protective behavior, or increase preventative interventions, behavior, or increase preventative interventions, may be beneficial. may be beneficial. If the less healthy are poor due to work disability If the less healthy are poor due to work disability and medical costs, then health and disability and medical costs, then health and disability insurance need to be strengthened. insurance need to be strengthened.

H t-1 H t S t-1 S t

H t-1 H t S t-1 S t

C t-1 C t H t-1 H t S t S t-1

C t-1 C t H t-1 H t S t S t-1

A Markov model of Health/SES dynamics A Markov model of Health/SES dynamics The evolution of socioeconomic states S t The evolution of socioeconomic states S t and health states H t is modeled as a first- - and health states H t is modeled as a first order Markov process, order Markov process, (H t ,S t |H t ,S t ) = f (H t |H t ,S t ) f (S t |H t ,H t ,S t ), f (H t ,S t |H 1 ,S 1 ) = f H H (H t |H 1 ,S 1 ) f S S (S t |H t ,H 1 ,S 1 ), f t- -1 t- -1 t- -1 t- -1 t- -1 t- -1 the conditional distribution of H t ,S t given the conditional distribution of H t ,S t given H t ,S t . H 1 ,S 1 . t- -1 t- -1 The model f (H t ,S t |H t ,S t ) is valid valid for a for a The model f (H t ,S t |H 1 ,S 1 ) is t- -1 t- -1 history H t ,S t if it is the true conditional history H 1 ,S 1 if it is the true conditional t- -1 t- -1 distribution of H t ,S t given this history. distribution of H t ,S t given this history.

is a structural structural or or causal causal model for H model for H t ,S t f is a t ,S f t relative to a family of histories if it has the to a family of histories if it has the relative invariance property that it is valid for each property that it is valid for each invariance history in the family. history in the family. Operationally, invariance means that Operationally, invariance means that within specified history and treatment within specified history and treatment , f has the transferability transferability property property domains , f has the domains that it is valid in different populations that it is valid in different populations where the marginal distribution of H t ,S t where the marginal distribution of H 1 ,S t- -1 t- -1 1 changes, and the predictability or changes, and the predictability or invariance under treatments property that property that invariance under treatments it remains valid following policy it remains valid following policy interventions that alter the marginal interventions that alter the marginal distribution of H t ,S t . distribution of H 1 ,S 1 . t- -1 t- -1

Restricted history and treatment domains Restricted history and treatment domains identify families families of structural models of structural models . . identify S is conditionally non causal for H if for H if conditionally non- -causal S is (H t |H t ) is a valid model; i.e., given H t , f (H t |H 1 ) is a valid model; i.e., given H 1 , f t- -1 t- -1 knowledge of S t is not needed not needed to to knowledge of S 1 is t- -1 achieve the invariance properties of a achieve the invariance properties of a causal model. [Granger non- -causality] causality] causal model. [Granger non … f ) … Conversely, if f (H t |H t ,S t (H t |H t ), then Conversely, if f (H t |H 1 ,S 1 ) f (H t |H 1 ), then t- -1 t- -1 t- -1 knowing S t knowing S contributes to the 1 contributes to the t- -1 predictability of H of H t . A direct causal link is t . A direct causal link is predictability possible, but not proved unless common possible, but not proved unless common factors can be ruled out. factors can be ruled out.