Essays on Health Economics

This thesis examines two Health Economics topics: the economics of antibiotic resistance, and the effect of pollution on health and health care costs. Chapter 2 explores the concept of optimal antibiotic use, focusing on antibiotic over/under use. Overuse is defined as any uncoordinated use above the social optimum which would prevail in a coordinated market. We find that overuse depends on the infection transmission rate and the cost of antibiotic use. In the simple case where the transmission rate is 0, there is no over/under use. However, for sufficiently high costs associated with antibiotic use we see under use of antibiotics while sufficiently low costs result in overuse.

Chapter 3 examines the link between knowledge about antibiotic consumption and resistance, and willingness-to-pay for antibiotic-free products. I designed a survey to collect primary data, using the contingent valuation method to obtain the willingness-to-pay. On average, respondents are willing to pay 57% more for the antibiotic-free product they purchase the most and 52% more for the product they purchase the least, compared to the regular option of the good. I find that for the product most purchased, a one standard deviation increase in knowledge, increases the willingness-to-pay for the antibiotic-free product by $0.085 over the price of the regular option of the good.

Chapter 4 investigates the impact of pollution on hospital attendance and subsequent costs in Leicester, using data from the University Hospitals of Leicester NHS Trust. The identification relies on the spatial and temporal variation of pollution, and temporal variation in wind speed and direction. We find that exposure to higher levels of particulate matter with an aerodynamic diameter less than 10 pm (PM10) has a positive effect on the total number of hospital visits and total costs. Specifically, each extra standard deviation of exposure to PM10 costs the city of Leicester $5.7 million to treat older adults and children.