25 January 2021

Effect of health shocks on economic indicators and behavioural choices

While a health shock may have an effect on the economic wellbeing of households and individuals, economic shocks may also have an effect on the health capital. To analyse these intertwined relationships and identify possible causal effects, Helena Ting used quantitative techniques in her PhD thesis. Interview.

Why did you decide to study the nexus of health and development?

I have always been interested in health but have always studied or worked on it from a health practice point of view. My research allowed me to examine health through the lens of economics. I applied various analytical methods to identify possible effects between the health variables and economic outcomes and to grasp their policy implications.

Can you describe each of your chapters and its findings?

In the first paper, I study the propensity to save on permanent and transitory income shocks in South Africa. While theory would predict that households should save their transitory income (such as windfalls or lottery) while consuming their permanent incomes (those that are determined by age, gender and education), I find that households save a portion of their permanent as well as their transitory incomes. Reasons such as income insecurity and credit constraint force households to consume and save in a way that is theoretically suboptimal. 

In the second paper, I implement a pseudo-experimental procedure to study the effect of a health shock, tuberculosis, on employment in South Africa. While TB is transmissible, it becomes non-infectious within weeks of medication adherence, and most individuals can be cured with six months of treatment. After demonstrating the balance between the population with and without TB, and accounting for symptoms and other factors, I find that TB is not a factor associated with job losses, but individuals with TB are less likely to find jobs. This result shows that although great improvements in TB treatment and control have been made in South Africa, challenges remain for individuals to return to work and life after an infection.

In the third paper, I study the behaviour of alcohol consumption in Chinese households in an economic model of addiction. I develop an empirical framework based on a recent theory extension that incorporates health into the model. This leads to an equation that is non-linear, where the consumption of the addictive good increases with the strength of addiction, and decreases with its negative health effects. This means that although addiction is an ever-increasing consumption of a certain good across time periods, individuals’ awareness of the negative health effects decreases addictive consumption. Therefore, education policies aimed at promoting the negative health effect of smoking, substance abuse or unhealthy diets, for example, are effective in reducing such addictive consumptions. 

What are you doing now?

I continue to work on my research, and also on a project that applies computing techniques to enhance transparency in the health field.

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Helena Ting defended her PhD thesis in Development Economics in November 2020. Associate Professor Martina Viarengo presided the committee, which included Professor Timothy Swanson, supervisor, Dr Joëlle Noailly, Lecturer, and Associate Professor Günther Fink, Swiss Tropical and Public Health Institute, University of Basel.

Full citation of the PhD thesis:
Ting, Helena. “Essays on Health and Development.” PhD thesis, Graduate Institute of International and Development Studies, Geneva, 2020.
For access, please contact Dr Ting.

Banner picture: excerpt from an image by AlexLMX/
Interview by Nathalie Tanner, Research Office.