Health Economics Research in Primary Prevention of Cancer: Assessment, Current Challenges, and Future Directions.

In the past 2 decades, the demand for information on health economics research to guide health care decision making has substantially increased. Studies have provided evidence that eliminating or reducing tobacco use; eating a healthy diet, including fruit and vegetables; being physically active; reducing alcohol consumption; avoiding ultraviolet radiation; and minimizing exposure to environmental and occupational carcinogenic agents should substantially reduce cancer incidence in the population. The benefits of these primary prevention measures in reducing cancer incidence are not instantaneous. Therefore, health economics research has an important role to play in providing credible information to decision makers on the health and economic benefits of primary prevention. This article provides an overview of health economics research related to primary prevention of cancer. We addressed the following questions: 1) What are the gaps and unmet needs for performing health economics research focused on primary prevention of cancer? 2) What are the challenges and opportunities to conducting health economics research to evaluate primary prevention of cancer? and 3) What are the future directions for enhancing health economics research on primary prevention of cancer? Modeling primary prevention of cancer is often difficult given data limitations, long delays before the policy or intervention is effective, possible unintended effects of the policy or intervention, and the necessity of outside expertise to understand key inputs or outputs to the modeling. Despite these challenges, health economics research has an important role to play in providing credible information to decision makers on the health and economic benefits of primary prevention of cancer.

Mostly harmless regulation? Electronic cigarettes, public policy, and consumer welfare.

Electronic cigarettes are a less harmful alternative to combustible cigarettes. We analyze data on e-cigarette choices in an online experimental market. Our data and mixed logit model capture two sources of consumer optimization errors: overestimates of the relative risks of e-cigarettes and present bias. Our novel data and policy analysis make three contributions. First, our predictions about e-cigarette use under counterfactual policy scenarios provide new information about current regulatory tradeoffs. Second, we provide empirical evidence about the role consumer optimization errors play in tobacco product choices. Third, we contribute to behavioral welfare analysis of policies that address individual optimization errors. Compared with standard cost-benefit analysis, our behavioral welfare economics analysis leads to much larger estimates of the costs of policies that discourage e-cigarette use or the benefits of policies that encourage e-cigarette use.

Does e-cigarette advertising encourage adult smokers to quit?

We provide the first causal evidence on whether e-cigarette advertising on television and in magazines encourages adult smokers to quit. We find the answer to be yes for TV advertising but no for magazine advertising. Our results indicate that a policy banning TV advertising of e-cigs would have reduced the number of smokers who quit in the recent past by approximately 3%. If the FDA were not considering regulations and mandates, e-cig ads might have reached the number of nicotine replacement therapy TV ads during that period. That would have increased the number of smokers who quit by around 10%.

Economic Approaches to Estimating Benefits of Regulations Affecting Addictive Goods.

The question of how to evaluate lost consumer surplus in benefit-cost analyses has been contentious. There are clear health benefits of regulations that curb consumption of goods with health risks, such as tobacco products and foods high in fats, calories, sugar, and sodium. Yet, if regulations cause consumers to give up goods they like, the health benefits they experience may be offset by some utility loss, which benefit-cost analyses of regulations need to take into account. This paper lays out the complications of measuring benefits of regulations aiming to curb consumption of addictive and habitual goods, rooted in the fact that consumers' observed demand for such goods may not be in line with their true preferences. Focusing on the important case of tobacco products, the paper describes four possible approaches for estimating benefits when consumers' preferences may not be aligned with their behavior, and identifies one as having the best feasibility for use in applied benefit-cost analyses in the near term.

The effect of potential electronic nicotine delivery system regulations on nicotine product selection.

AIMS: To estimate the effect of potential regulations of electronic nicotine delivery systems (ENDS) among adult smokers, including increasing taxes, reducing flavor availability and adding warning labels communicating various levels of risk. DESIGN: We performed a discrete choice experiment (DCE) among a national sample of 1200 adult smokers. We examined heterogeneity in policy responses by age, cigarette quitting interest and current ENDS use. Our experiment overlapped January 2015 by design, providing exogenous variation in cigarette quitting interest from New Year resolutions. SETTING: KnowledgePanel, an online panel of recruited respondents. PARTICIPANTS: A total of 1200 adult smokers from the United States. MEASUREMENTS: Hypothetical purchase choice of cigarettes, nicotine replacement therapy and a disposable ENDS. FINDINGS: Increasing ENDS prices from $3 to $6 was associated with a 13.6 percentage point reduction in ENDS selection (P < 0.001). Restricting flavor availability in ENDS to tobacco and menthol was associated with a 2.1 percentage point reduction in ENDS selection (P < 0.001). The proposed Food and Drug Administration (FDA) warning label was associated with a 1.1 percentage point reduction in ENDS selection (P < 0.05) and the MarkTen warning label with a 5.1 percentage point reduction (P < 0.001). We estimated an ENDS price elasticity of -1.8 (P < 0.001) among adult smokers. Statistically significant interaction terms (P < 0.001) imply that price responsiveness was higher among adult smokers 18-24 years of age, smokers who have vaped over the last month and smokers with above the median quitting interest. Young adult smokers were 3.7 percentage points more likely to choose ENDS when multiple flavors were available than older adults (P < 0.001). Young adult smokers and those with above the median cigarette quitting interest were also more likely to reduce cigarette selection and increase ENDS selection in January 2015 (P < 0.001), potentially in response to New Year's resolutions to quit smoking. CONCLUSIONS: Increased taxes, a proposed US Food and Drug Administration warning label for electronic nicotine delivery systems and a more severe warning label may discourage adult smokers from switching to electronic nicotine delivery systems. Reducing the availability of flavors may reduce ENDS use by young adult smokers.

Cigarette Taxes and Older Adult Smoking: Evidence from the Health and Retirement Study.

In this study, we use the Health and Retirement Study to test whether older adult smokers, defined as those 50 years and older, respond to cigarette tax increases. Our preferred specifications show that older adult smokers respond modestly to tax increases: a $1.00 (131.6%) tax increase leads to a 3.8-5.2% reduction in cigarettes smoked per day (implied tax elasticity = -0.03 to -0.04). We identify heterogeneity in tax elasticity across demographic groups as defined by sex, race/ethnicity, education, and marital status and by smoking intensity and level of addictive stock. These findings have implications for public health policy implementation in an aging population.

Care-giver advice as a preventive measure for drinking during pregnancy: zeros, categorical outcome responses, and endogeneity.

We conduct an empirical investigation of the impact of prenatal care-giver advice on alcohol consumption by pregnant women. In the design of the model and estimator, we pay particular attention to three aspects of the data. First, a large proportion of pregnant women do not drink at all. To accommodate this aspect of the sample we base the essential formulation of the model on the modified version of the two-part approach of Duan et al. (Journal of Business and Economic Statistics 1983; 1: 115-126.) suggested by Mullahy (Journal of Health Economics 1998; 17: 247-281.). Second, in the survey that we analyze (the 1988 National Maternal and Infant Health Survey - NMIHS), respondents were only required to report their consumption up to a specified range of values (e.g. 1-2 drinks per week, 2-5 drinks per week, and so on). For this reason, the model is cast in the grouped regression framework of Stewart (Review of Economic Studies 1983; 50: 141-149.). Third, the binary physician advice variable is likely to be endogenous and the econometric specification explicitly accounts for this possibility. To summarize the results, we find that failing to account for endogeneity leads to the counterintuitive conclusion that advice has a positive and statistically significant influence on drinking during pregnancy. When the model is extended to allow for potential endogeneity, we find that advice has a negative and statistically significant impact.

The association between health risks and medical expenditures in a Japanese corporation.

PURPOSE: To examine the relationship between health risks and medical care expenditures in an employer setting in Japan. DESIGN: A cross-sectional, correlational study. SETTING: A large Japanese corporation. SUBJECTS: A total of 6543 employees of a large Japanese electronics company, for whom medical expenditures, lifestyle risks and biometric data were available, were included in the analysis. Seventy-six Percent were male, and subjects were primarily white-collar workers. MEASURES: Medical expenditure data were available for fiscal year 2000, including inpatient, outpatient, and total expenditures, measured in Japanese yen. Binary expenditure indicators for those having no claims and those having high claims (90th percentile) were also created. Risk measures included biometric assessment of high blood pressure and high body mass index (BMI, body weight and height) and self-reported stress, lack of exercise, excess alcohol consumption, poor nutrition, current smoking, and recent quitting. High cholesterol and high blood glucose measures were also available for some subjects from company physicals. RESULTS: Average total expenditures were 48,017 yen (US$445). The 90th percentile of the expenditure distribution was approximately 111,750yen (US$1037). The most commonly reported risk factors were lack of exercise (52.9%), current smoking (35 %), stress (33%), and poor nutritional habits (23.6%). Least common were recently quitting smoking (2%), high blood pressure (4.1 %), and high blood glucose (9.4 %). The prevalence of overweight or obesity was 15.9%. High blood pressure and recent quitting were consistently related to high expenditures, after adjusting for the influence of other predictors. Adjusted expenditures were 76 % higher for recent quitters and 22.6% higher for employees with high blood pressure. Males and younger employees had consistently lower expenditures. Current smoking poor nutrition, and alcohol risk were also associated with lower expenditures. Those with multiple cardiovascular risk factors had adjusted medical expenditures that were 128% higher than those with no cardiovascular risks. Those who had multiple risk factors for stroke had expenditures that were 13% lower than those without stroke risk factors. CONCLUSIONS: This paper represents a first step in examining the association between health risks and medical expenditures in Japanese employees. The investigation uncovered some significant levels of risk for lack of exercise, smoking, and stress. Although results indicate some significant associations between health risks and medical expenditures, several unexpected assocations were noted that require further study. Such information provides a solid foundation for health promotion efforts in Japan and direction for subsequent investigations of health risks and medical expenditures. Future studies should address important issues of health risk measurement, data collection, and research design.

Accounting for misclassification error in retrospective smoking data.

Recent waves of major longitudinal surveys in the US and other countries include retrospective questions about the timing of smoking initiation and cessation, creating a potentially important but under-utilized source of information on smoking behavior over the life course. In this paper, we explore the extent of, consequences of, and possible solutions to misclassification errors in models of smoking participation that use data generated from retrospective reports. In our empirical work, we exploit the fact that the National Longitudinal Survey of Youth 1979 provides both contemporaneous and retrospective information about smoking status in certain years. We compare the results from four sets of models of smoking participation. The first set of results are from baseline probit models of smoking participation from contemporaneously reported information. The second set of results are from models that are identical except that the dependent variable is based on retrospective information. The last two sets of results are from models that take a parametric approach to account for a simple form of misclassification error. Our preliminary results suggest that accounting for misclassification error is important. However, the adjusted maximum likelihood estimation approach to account for misclassification does not always perform as expected.