Assignment:
1. Suppose you are collecting data from a country like Japan where the government sets the price of health care. Each prefecture in Japan has a different set of prices (for example, Tokyo has higher prices than rural Hokkaido). Data for 1999 is displayed in the table below:
Outpatient utilization in two regions in Japan
|
Region
|
Outpatient visits
|
Price/Visit
|
|
Tokyo
|
1.25/month
|
20¥
|
|
Hokkaido
|
1.5/month
|
10¥
|
a. What is the price elasticity of demand for health care consumers in Japan (using only this data)?
b. Suppose that incomes are generally much higher in Tokyo than Hokkaido. Is your answer to the last question an overestimate or underestimate of price elasticity? Justify your answer. [Hint: It may be helpful to plot the data points from Table below and consider likely demand curves for Tokyo and Hokkaido.]
2. The table below shows data from Rich-Edwards et al. (2005) on the prevalence of various afflictions among female nurses who were born at different weights. Use the table to answer the following questions:
a. Summarize the data in the figure in one or two concise sentences.
*Indicates statistically significant difference from the average birth weight cohort.
Hazard ratios are adjusted for age and body mass index (BMI).
Source Data from Table 1 in Rich-Edwards et al. (2005).
b. Discuss the data in light of what you know about the thrifty phenotype hypothesis.
c. How would you use the Grossman model to formalize the thrifty phenotype hypothesis?