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ECO3125 Introduction to Health Economics

Take Home Midterm Exam

February 23, 2024

1 Experimental Evidence Shows That Housing Vouch-ers Provided Measurable Benefits, Including Par-ent Stress Reduction

For the following 10 questions please refer to the reading provided on brightspace

1. The authors claim that their work is “causal evidence”, is this claim true? Why?      [3 marks]

2. Identify the treatment group and the control group.      [1 marks]

3. The authors say “At wave 2, no voucher users had relinquished their voucher, and no control cases were receiving housing assistance”. Given your answer in 1, why is this statement important?           [3 marks]

4. The authors gather two waves of data. Do they need two waves? Explain.          [3 marks]

5. Based on your reading of this article, what type of descriptive statistics is missing?     [3 marks]

6. Go to the online appendix1 and locate the missing table(s). Explain what infor-mation it (they) provides (provide). [2 marks]

7. The authors state that “housing is health”. Given this statement, can you relate housing affordability to health using two hypotheses? Please make sure you relate it to hypotheses discussed in class. [3 marks]

8. Assume we focus on the health outcomes of children aged 2 and 3 years. Can you think of a specific hypothesis to relate housing affordability to health? Explain briefly. Please make sure you relate it to a hypothesis discussed in class.    [3 marks]

For the results please ignore the Instrumental Variable results and discussion because we did not go in-depth in our discussion of Instru-mental Variables.

9. In your own words, explain what is your understanding of the intent to treat in the context of the paper. [3 marks]

10. Using the treatment group and control group as they are randomized in the exper-iment and all the details provided on the survey, describe the estimation approach you would use (i.e., how will you assess the effect of housing vouchers?). [3 marks]

2 Assessing the Impact of Minimum Wage Increases on Obesity Rates

Background:

You are a public health researcher conducting a study to evaluate the impact of minimum wage increases on obesity rates in two regions of a fictional country, Health-land. The government implemented minimum wage hikes in select regions starting in 2017, while keeping minimum wages unchanged in other regions as control groups.

Data:

You have access to obesity prevalence data from 2015 to 2020 for two regions: Region A (treatment group) and Region B (control group). The data includes annual obesity rates (percentage of population classified as obese) for adults aged 18 and above.

Exercise:

1. Compute the average obesity rate for each region before and after the minimum wage increases. [2 marks]

Figure 1: Obesity Rates Over Time for Treatment and Control Groups

2. Assess the minimum wage increase on obesity rates. [4 marks]

3. What are the potential mechanisms through which minimum wage policies may influence obesity prevalence? Refer to the material covered in class to discuss the mechanisms. [2 marks]

3 Opoids Crisis

Americans consume Opioids more than any other country. Some argue that this over-consumption is due to demand factors (people desire more Opioids and pressure the doctors to prescribe them for pain). In contrast, others argue that it is because of physicians over prescriptions.

Exercise:

As a consultant, you are invited to propose an approach to detect (i.e., to identify) whether the overconsumption is caused by people’s demand for Opioids or caused by the increase in Opioids availability through legal overprescriptions. [Hint: you will need to think of a field experiment.] [5 marks]

Additional Instructions: You are allowed to get inspired (closely) from ideas we have seen in class and adapt them to this context. This is not considered plagiarism. You can illustrate your concept using a figure; if you choose to use a figure, you will still need to provide some explanation about the details of the experiment.