Essays on the Economics of Health

Abstract

This dissertation consists of three essays on the economics of health. The first chapter studies the effects of shutting down prescribers, dispensers, and distributors that inappropriately handle prescription opioids on local opioid supply and mortality. With competitive supply, theory suggests the effects of closing any single supplier will be offset by substitution. Closing a supplier may have an effect on overall supply, however, if the targeted supplier is more lax with prescriptions than others or if the action has general deterrence effects. To examine enforcement empirically, chapter one exploits differential timing of initial enforcement actions across different areas of the US. The results show supplier enforcement actions reduced overall opioid shipments by 20 percent in the average affected county for three years. Enforcement interventions also reduced opioid mortality. In the areas with the largest interventions, enforcement reduced overdose death rates by 22 percent for five years. Overall, these findings demonstrate a larger role for supply-side drug control strategies to improve health than theory and prior literature suggested. Chapter two studies why U.S. opioid overdose death rates have increased so greatly and for so long. Between 1990 and 2021, opioid overdose death rates in the U.S. rose nearly continuously. Such a long period of sustained increase goes against conventional theory, which suggests that the public and private policies that respond to harmful drug epidemics should reduce deaths over time. To explain why the opioid epidemic is different, chapter two develops and estimates a model of addiction that incorporates thick market externalities in opioid use. The results imply that the majority of opioid deaths in recent years are due to these externalities. The third chapter examines economic determinants of mortality. Drawing from new data which links Census and vital records for individuals born in the late 1800s and early 1900s, chapter two studies the long-term effects of the Great Depression on mortality. Results show the Great Depression caused 17.6 million years of lost life. Interacting this with an adjusted value of a statistical life year implies that social welfare losses due to the mortality impacts of the Great Depression were between 0.5 and 0.8 times as large as losses of personal income.