Health Investment Complementarities Under Competing Risks
Will Dow, Tom Philipson, and Xavier X. Sala-i-Martin
American Economic Review, (forthcoming), 1998
Abstract
Applying the competing-risks model to multi-cause mortality, this paper
provides a theoretical and empirical investigation of the positive complementarities that occur between
disease-specific policy interventions. We argue that since an individual cannot die twice, competing risks
imply that individuals will not waste resources on causes that are not the most immediate, but will make
health investments so as to equalize cause-specific mortality. However, equal mortality risk from a
variety
of diseases does not imply that disease-specific public health interventions are a waste. Rather, a cause-
specific
intervention produces spillovers to other disease risks, so that the overall reduction in mortality
will generally be larger than the direct effect measured on the targeted disease. The assumption that
mortality from non-targeted diseases remains the same after a cause-specific intervention underestimates
the true effect of such programs, since the background mortality is also altered as a result of intervention.
Analyzing data from one of the most important public
health programs ever introduced, the Expanded Program on Immunization (EPI) of the United Nations,
we
find evidence for the existence of such complementarities, involving causes that are not biomedically, but
behaviorally, linked. The countries studied in this paper are Malawi, Tanzania, Zambia, and Zimbabwe.
JEL Classification:
I10, H00, O1
Keywords:
Complementarities, Disease-specific Public Health Interventions, Tetanus Programs, Endogenous Mortality