Thesis Thursday: Luke Wilson

On the third Thursday of every month, we speak to a recent graduate about their thesis and their studies. This month’s guest is Dr Luke Wilson who has a PhD from Lancaster University. If you would like to suggest a candidate for an upcoming Thesis Thursday, get in touch.

Title
Essays on the economics of alcohol and risky behaviours
Supervisors
Colin P. Green, Bruce Hollingsworth, Céu Caixeiro Mateus
Repository link
https://doi.org/10.17635/lancaster/thesis/636

What inspired your research and how did ‘attractiveness’ enter the picture?

Without trying to sound like I have a problem, I find the subject of alcohol fascinating. The history of it, how it is perceived in society, how our behaviours around it have changed over time, not to mention it tastes pretty damn good!

Our attitude to alcohol is fascinating and diverse. Over 6.5 million people have visited Munich in the last month alone to attend the world’s largest beer festival Oktoberfest, drinking more than 7.3 million litres of beer. However, 2020 will be the 100-year anniversary of the introduction of prohibition in the United States. Throughout history, alcohol consumption has been portrayed as both a positive and negative commodity in society.

For my thesis, I wanted to understand individuals’ current attitudes to drinking alcohol; whether they are affected by legal restrictions such as being constrained by the minimum legal drinking age of 18 in the UK, whether their attitudes have changed over their life course, and how alcohol fits among a wider variety of risky behaviours such as smoking and illicit drug use.

As for how did ‘attractiveness’ enter the picture, I was searching for datasets that allow for longitudinal analysis, as well as contain information on risky behaviours, and I stumbled upon the data that asked the interviewers to rate the attractiveness of the respondent. My first thought was what a barbaric question to ask, but I quickly realised that the question is used a lot in determining the ‘beauty premia’ in the labour market. However, nobody has examined how these ‘beauty premia’ might come into effect while still at school.

Are people perceived to be more attractive at an advantage or a disadvantage in this context?

The current literature provides a compelling view that there are sizeable labour market returns to attractiveness in the United States (Fletcher, 2009; Stinebrickener et al., 2019). What is not well understood, and where our research fits in, is how physical attractiveness influences earlier, consequential, decisions. The previous literature seeks to provide, in essence, the effect of attractiveness on labour market outcomes conditional on individual characteristics, both demographic and ‘pre-market’. However, attractiveness is also likely to change both the opportunities and costs of a variety of behaviours during adolescence.

Exploiting the interviewer variations in ratings of attractiveness, we found that attractiveness of adolescents has marked effects on a range of risky behaviours. For instance, more attractive teens are less likely to smoke than teens of average or than lower attractiveness teens. However, attractiveness is associated with higher teen alcohol consumption. Attractive females, in particular, are substantially more likely to have consumed alcohol in the past twelve months, than those of or below average attractiveness.

How did you model the role of the minimum legal drinking age in the UK?

I was highly unoriginal and estimated the effect of the minimum legal drinking age in the UK using a regression discontinuity design approach, like that of Carpenter and Dobkin (2009). I jest but it is one of the most effective ways to estimate a causal effect of a particular law/policy that is triggered by age, especially for the UK which has not changed its legal drinking age.

Where our research deviates is that we focus on the law itself and analyse how an individual’s consumption of alcohol in a particular school year may differ at the cut-off (aged 18). For example, do those born in September purchase alcohol for themselves and their younger friends or do we all adhere to the laws that govern us and wait patiently…

Are younger people drinking less, nowadays?

The short answer is yes! Evidence from multiple British surveys shows a consistent pattern over 10-15 years of reduced participation in drinking, reduced consumption levels among drinkers, reduced prevalence of drunkenness, and less positive attitudes towards alcohol in young adults aged 16 to 24.

Friends of mine at the University of Sheffield (Oldham et al., 2018) have sought to unravel the decline in youth drinking further and find evidence that younger drinkers are consuming alcohol less often and in smaller quantities. They find that, among those who were drinkers, the percentage of 16-24 year-olds who drank in the last week fell from 76% to 60% between 2002 and 2016, while for 11-15 year-olds it fell from 35% to 19%. Additionally, alongside declines in youth drinking, the proportion of young adults who had ever tried smoking fell from 43% in 1998 to 17% in 2016.

While we are witnessing this decline, the jury is still out as to why it is happening. Explanations so far include that increases in internet use (social media) and online gaming are changing the way young people spend their leisure time. Additionally, economic factors may play a role, such as the increase in the cost of alcohol, as well as the increase in tuition fees and housing costs meaning that young adults have less disposable income.

What were some of the key methodological challenges you faced in your research?

The largest methodological problem I faced throughout my PhD was finding suitable data to examine the effect of the minimum legal drinking age in the setting of the UK. One of the key underlying components in a regression discontinuity design is the running variable. The running variable I use is age in months of the respondents, which is calculated using the date in which the survey interview took place as well as the month and year of birth of the respondent. Unfortunately, due to issues with data being disclosive, it is very difficult to obtain data that have these variables as well as suitable questions regarding alcohol consumption. Luckily, the General Household Survey (Special Licence version) had the variables I needed to conduct the analysis, albeit only between 1998 and 2007.

How might your research inform policymakers seeking to discourage risky behaviours?

Definitely a difficult question to answer, especially given that one of my chapters uses interviewer variations in ratings of attractiveness of the respondents, so I have stayed well clear from drawing individual policy recommendations from that chapter. That said, these results are important for a number of interrelated reasons. Previous labour market research demonstrates marked effects of attractiveness. My results suggest that important pre-market effects of attractiveness on individual behaviour are likely to be consequential for both labour market performance and important pre-market investments. In this sense, the findings suggest that physical attractiveness provides another avenue for understanding non-cognitive traits that are important in child and adolescent development and carry lifetime consequences.

The chapter on the minimum legal drinking age provides intriguing results regarding the effectiveness of policies that impose limits on ‘consumption’ through age-restrictive policies; whether they are enough on their own or merely delay consumption. This is especially relevant given that there is currently a discussion about increasing the minimum legal tobacco purchasing age to 21 and increasing the age in which you can buy a national lottery ticket from age 16 to 18 in the UK.

Sam Watson’s journal round-up for 10th October 2016

Every Monday our authors provide a round-up of some of the most recently published peer reviewed articles from the field. We don’t cover everything, or even what’s most important – just a few papers that have interested the author. Visit our Resources page for links to more journals or follow the HealthEconBot. If you’d like to write one of our weekly journal round-ups, get in touch.

This week’s journal round up-is a special edition featuring a series of papers on health econometrics published in this month’s issue of the Journal of the Royal Statistical Society: Series A.

Healthcare facility choice and user fee abolition: regression discontinuity in a multinomial choice setting. JRSS: A [RePEcPublished October 2016

Charges for access to healthcare – user fees – present a potential barrier to patients in accessing medical services. User fees were touted in the 1980s as a way to provide revenue for healthcare services in low and middle income countries, improve quality, and reduce overuse of limited services. However, a growing evidence base suggests that user fees do not achieve these ends and reduce uptake of preventative and curative services. This article seeks to provide new evidence on the topic using a regression discontinuity (RD) design while also exploring the use of RD with multinomial outcomes. Based on South African data, the discontinuity of interest is that children under the age of six are eligible for free public healthcare whereas older children must pay a fee; user fees for the under sixes were abolished following the end of apartheid in 1994. The results provide evidence that removal of user fees resulted in more patients using public healthcare facilities than costly private care or care at home. The authors describe how their non-parametric model performs better, in terms of out-of-sample predictive performance, than the parametric model. And when the non-parametric model is applied to examine treatment effects across income quantiles we find that the treatment effect is among poorer families and that it is principally due to them switching between home care and public healthcare. This analysis supports an already substantial literature on user fees, but a literature that has previously been criticised for a lack of methodological rigour, so this paper makes a welcome addition.

Do market incentives for hospitals affect health and service utilization?: evidence from prospective pay system–diagnosis-related groups tariffs in Italian regions. JRSS: A [RePEcPublished October 2016

The effect of pro-market reforms in the healthcare sector on hospital quality is a contentious and oft-discussed topic, not least due to the difficulties with measuring quality. We critically discussed a recent, prominent paper that analysed competitive reforms in the English NHS, for example. This article examines the effect of increased competition in Italy on health service utlisation: in the mid 1990s the Italian national health service moved from a system of national tariffs to region-specific tariffs in order for regions to better incentivise local health objectives and reflect production costs. For example, the tariffs for a vaginal delivery ranged from €697 to €1,750 in 2003. This variation between regions and over time provides a source of variation to analyse the effects of these reforms. The treatment is defined as a binary variable at each time point for whether the regions had switched from national to local tariffs, although one might suggest that this disposes of some interesting variation in how the policy was enacted. The headline finding is that the reforms had little or no effect on health, but did reduce utilisation of healthcare services. The authors interpret this as suggesting they reduce over-utilisation and hence improve efficiency. However, I am still pondering how this might work: presumably the marginal benefit of treating patients who do not require particular services is reduced, although the marginal cost of treating those patients who do not need it is likely also to be lower as they are healthier. The between-region differences in tariffs may well shed some light on this.

Short- and long-run estimates of the local effects of retirement on health. JRSS: A [RePEcPublished October 2016

The proportion of the population that is retired is growing. Governments have responded by increasing the retirement age to ensure the financial sustainability of pension schemes. But, retirement may have other consequences, not least on health. If retirement worsens one’s health then delaying the retirement age may improve population health, and if retirement is good for you, the opposite may occur. Retirement grants people a new lease of free time, which they may fill with health promoting activities, or the loss of activity and social relations may adversely impact on ones health and quality of life. In addition, people who are less healthy may be more likely to retire. Taken all together, estimating the effects of retirement on health presents an interesting statistical challenge with important implications for policy. This article uses the causal inference method du jour, regression discontinuity design, and the data are from that workhorse of British economic studies, the British Household Panel Survey. The discontinuity is obviously the retirement age; to deal with the potential reverse causality, eligibility for the state pension is used as an instrument. Overall the results suggest that the short term impact on health is minimal, although it does increase the risk of a person becoming sedentary, which in the long run may precipitate health problems.

 

Other articles on health econometrics in this special issue:

The association between asymmetric information, hospital competition and quality of healthcare: evidence from Italy.

This paper finds evidence that increased between hospital competition does not lead to improved outcomes as patients were choosing hospitals on the basis of information from their social networks. We featured this paper in a previous round-up.

A quasi-Monte-Carlo comparison of parametric and semiparametric regression methods for heavy-tailed and non-normal data: an application to healthcare costs.

This article considers the problem of modelling non-normally distributed healthcare costs data. Linear models with square root transformations and generalised linear models with square root link functions are found to perform the best.

Phantoms never die: living with unreliable population data.

Not strictly health econometrics, more demographics, this article explores how to make inferences about population mortality rates and trends when there are unreliable population data due to fluctuations in birth patterns. For researchers using macro health outcomes data, such corrections may prove useful.

Credits