Jerome Adda

Effects of income and wealth on GHQ depression and poor self rated health in white collar women and men in the Whitehall II study

Study objective: To determine whether measures of income and wealth are associated with poor self rated health and GHQ depression. Design: Whitehall II study of London based civil servants re-interviewed between 1997–1999; 7162 participants. Main results: A twofold age adjusted difference in morbidity was observed between the top and bottom of the personal income hierarchy for both sexes. For household income and particularly for wealth these associations are stronger. After adjusting for health at baseline the associations between personal income and both health outcomes are reduced by about 40%–60%. For household income the attenuation is somewhat smaller and for wealth is about 30%. Adjusting for other sociodemographic factors leads to further attenuation of the effects. Conclusions: The associations between income, particularly personal income, and morbidity can be largely accounted for by pre-existing health and other measures of social position. The strong independent association between household wealth—a measure of income earned over decades and across generations—and morbidity are likely to be related to a set of early and current material and psychosocial benefits.

The impact of income shocks on health: evidence from cohort data

We study the effect of permanent income innovations on health for a prime-aged population. Using informationon more than half a million individuals sampled over a twenty-five year period in three different cross-sectionalsurveys we aggregate data by date-of-birth cohort to construct a ?synthetic cohort? dataset with details of income,expenditure, socio-demographic factors, health outcomes and selected risk factors. We then exploit structuraland arguably exogenous changes in cohort incomes over the eighties and nineties to uncover causal effects ofpermanent income shocks on health. We find that such income innovations have little effects on health, but doaffect health behaviour and mortality. We study the effect of permanent income innovations on health for a prime-aged population. Using informationon more than half a million individuals sampled over a twenty-five year period in three different cross-sectionalsurveys we aggregate data by date-of-birth cohort to construct a ?synthetic cohort? dataset with details of income,expenditure, socio-demographic factors, health outcomes and selected risk factors. We then exploit structuraland arguably exogenous changes in cohort incomes over the eighties and nineties to uncover causal effects ofpermanent income shocks on health. We find that such income innovations have little effects on health, but doaffect health behaviour and mortality.

Socio-economic status and health: Causality and pathways

The direct causal effects of socioeconomic status (SES) on health inequalities are analyzed. SES is non-significant for most of the acute health conditions. However, SES have direct causal effect on mental health and degenerative conditions. The lack of medical insurance coverage for mental and chronic illness may lead to the direct causal effect. The statistical methods, used to study causal effects, are more suitable for explaining pathways linking SES to specific health conditions, rather than for testing causality between SES and health.

The Career Costs of Children

We estimate a dynamic life cycle model of labor supply, fertility, and savings, incorporating occupational choices, with specific wage paths and skill atrophy that vary over the career. This allows us to understand the trade-off between occupational choice and desired fertility, as well as sorting both into the labor market and across occupations. We quantify the life cycle career costs associated with children, how they decompose into loss of skills during interruptions, lost earnings opportunities, and selection into more child-friendly occupations. We analyze the long-run effects of policies that encourage fertility and show that they are considerably smaller than short-run effects.

Crime and the Depenalization of Cannabis Possession: Evidence from a Policing Experiment

We evaluate the impact on crime of a localized policing experiment that depenalized the possession of small quantities of cannabis in the London borough of Lambeth. We find that depenalization policy caused the police to reallocate effort toward nondrug crime. Despite the overall fall in crime attributable to the policy, we find that the total welfare of local residents likely fell, as measured by house prices. We shed light on what would be the impacts on crime of a citywide depenalization policy by developing and calibrating a structural model of the market for cannabis and crime.

Smoking and Endogenous Mortality: Does Heterogeneity in Life Expectancy Explain Differences in Smoking Behavior?

This paper proposes a joint model of tobacco consumption and mortality over the life-cycle. The decision to smoke is a trade off between current utility derived from smoking and a mortality risk increasing with age. Individuals with a longer potential life expectancy have more incentive to cut back on smoking and thus self select out of smoking. Using detailed data on mortality, morbidity and smoking we are able to identify this selection effect. We empirically evaluate its importance in explaining heterogeneity in smoking behaviour among adults. We find that heterogeneity in potential life expectancy explains part of the heterogeneity in smoking behaviour, even when conditioning on sex, education and occupation and information on other risky behaviour. When we embed heterogeneous potential life expectancies within a rational addiction model of smoking, we find that the model is able to match the life cycle profiles of smoking.

Health Selection and the Effect of Smoking on Mortality

We show that individuals who are in poorer health, independently from smoking, are more likely to start smoking and to smoke more cigarettes than those with better non-smoking health. We present evidence of selection, relying on extensive data on morbidity and mortality. We show that health based selection into smoking has increased over the last fifty years with knowledge of its health effects. We show that the effect of smoking on mortality is higher for high educated individuals and for individuals in good non-smoking health.

Market Regulation and Firm Performance: The Case of Smoking Bans in the United Kingdom

This paper analyzes the effects on firms of a ban on smoking in public places. Our empirical strategy relies on comparing outcomes in Scotland before and after the Scottish smoking ban (introduced in March 2006) with those in northern England, where such a ban was not in place. Our analysis of survey data collected from public houses finds that the Scottish smoking ban reduced pub sales with no concomitant effect on prices. An event study analysis of the stock market performance of pub-holding companies corroborates the negative effect of the smoking ban on firm performance.

Liquidity constraints and time non-separable preferences

We present an intertemporal model of consumption and savings incorporating liquidity constraints and non-separable preferences. We solve the problem numerically and characterize the optimal consumption behavior. We explore the traditional puzzles highlighted in the empirical literature as excess smoothness of consumption, its excess sensitivity to current income and its excess persistence. We show that a model with durability and liquidity constraints is able to reproduce some of the stylized facts. Next we show that some of the econometric tests are not robust and can mistake liquidity constraints for habit formation. Hence previous results establishing habit formation on US data should be interpreted with caution.

Aggregation of non stationary demand systems

Abstract This paper studies under which conditions a cross-sectional regression yields unbiased estimates of the parameters of an individual dynamic model with fixed effects and individual-specific responses to macro shocks. We show that the OLS estimation of a relationship involving non stationary variables on a cross-section yields estimates which converge to the true value when calendar time tends to infinity. We then consider the particular case of an AI demand model, and we show, using French quarterly aggregate time-series, that budget shares, relative prices and the log of real total expenditure are I(1) and form a cointegrated system. We compare these macro estimates to estimates obtained from three Family Expenditure Surveys and find large differences.