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Title: Controlling for Gamma Heterogeneity in the Income-Mortality Link
Resulting in 1 citation.
1. Chapman, Kenneth S.
Hariharan, Govind
Controlling for Gamma Heterogeneity in the Income-Mortality Link
Presented: Lake Tahoe, NV, Issues in the Economic Analysis of Substance Abuse Session of the Western Economic Association meetings, June 1993
Cohort(s): Older Men
Publisher: Western Economic Association International
Keyword(s): Cost-Benefit Studies; Heterogeneity; Income; Mortality

Using data from the NLS of Mature Men this paper examines the thesis that "safety regulations save lives should be obvious". It is less obvious, but still true, that compliance with expensive regulations reduce income and, therefore, expenditures on health care for those affected. The possibility that this indirect effect of regulatory cost on mortality may outweigh the direct effect has caused the Office of Management and Budget (OMB) to object to air quality standards proposed by the Occupational Safety and Health Administration (OSHA). At an estimated annual cost of $163 million, these programs were projected to save between 8 and 14 lives each year. Most economists would estimate the desirability of proposed regulations using cost benefit analysis. Value of life estimates would be used to calculate the dollar value of the gain, which would then be compared to the costs. However, recent court decisions prevent OSHA from setting regulatory standards based on cost-benefit analyses But it remains true that people made poor by costly regulations are more likely to die. Hence, these regulations are desirable only if they prevent more deaths than they cause. This "health-health analysis will tend to approve more safety regulations than the traditional cost-benefit analysis, but may stop those that are the most counterproductive. Health-health analysis assumes that reduced income causes increased mortality. This paper we attempt to isolate the portion of the income-mortality association running from income to reduced health expenditures.
Bibliography Citation
Chapman, Kenneth S. and Govind Hariharan. "Controlling for Gamma Heterogeneity in the Income-Mortality Link." Presented: Lake Tahoe, NV, Issues in the Economic Analysis of Substance Abuse Session of the Western Economic Association meetings, June 1993.