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Disparities across Race and Gender: Economics of Health and Well-Being

Paper Session

Friday, Jan. 3, 2020 10:15 AM - 12:15 PM (PDT)

Marriott Marquis, Balboa
Hosted By: National Economic Association
  • Chair: Jevay Grooms, Howard University

Drug Quality and Gender Parity of Clinical Trial Participants

Britni Wilcher
,
American University

Abstract

Despite rapid advancements in medical technologies since the dawn of the 20th century, women are nearly two times more likely to experience an adverse drug event (ADE) than men. Existing literature concerned with the production of effective innovation point to short FDA review times, drug novelty, and duration of time between foreign and U.S. market launch as potential drivers of adverse drug events. However, it does not consider the extent to which clinical trial gender composition signal post market drug risks for women. Given that biological differences between sexes may lead to differential responses to a given drug treatment, gender disaggregated clinical trial results can inform regulator (un)certainty about safety risks new drugs pose for different populations. Using a novel dataset containing information on clinical trials and U.S. adverse drug reactions, this study exploits the 2012 FDA Safety and Innovation Act (FDASIA) requirement to report clinical trial results by sex to estimate the causal impact of clinical trial gender composition on risks associated with therapeutically novel drugs.

This is the first study to examine the effects of the 2012 FDASIA requirement to report clinical trial results by sex on ADE and a production function of effective innovation with the proportion of female clinical trial participants as an input. Three types of ADEs are considered including those leading to (1) death, (2) hospitalization, and (3) other serious events. An event study and difference-in-differences model is used to estimate the effect of clinical trial gender composition on adverse drug reactions.

About Face: Seeing Class and Race

Mark Paul
,
New College of Florida
Imari Smith
,
Duke University
Sarah E. Gaither
,
Duke University
William Darity
,
Duke University

Abstract

People’s economic status has meaningful impact on individual’s life outcome and daily
interactions, and the mere perception of one’s socioeconomic standing can have major
implications. Researchers and the general public are comfortable with the idea that income
impacts individuals live outcomes, but they tend to equate this with other important
socioeconomic indicators, such as wealth. Building on previous research which has demonstrated
the biases we bring when we think someone is from a lower status group, we conduct two studies
to test if people are accurate in identifying the difference between income and wealth and if they can identify individuals as high/low income and high/low wealth using facial imagines. We test this utilizing a unique dataset that has detailed information on individuals’ economic indicators, including income and wealth, along with their photos. In our first study, we found that participants defined income accurately 58.5% of the time, while participants were only correct 33.9% of the time when asked to define wealth. In our second study, we found participants were better than chance at categorizing targets as either high- or low-income. For the wealth treatment we found participants were more accurate at categorizing targets as either low- or high-wealth than chance. We find that white and Asian targets are much more likely to be categorized correctly compared to black and Hispanic targets.

Pursuit of Happiness

Joaquin Alfredo-Angel Rubalcaba
,
University of North Carolina-Chapel Hill
Candis Watts Smith
,
University of North Carolina-Chapel Hill

Abstract

There is no shortage of evidence documenting glaring disparities between white and Black Americans. Persistent racial disparities are the consequence of a historic system of structural racism. These inequities justify the push for a program of reparations to Blacks, and scholars have estimated amounts to be redistributed based on stolen wages during slavery and lost wealth during the Jim Crow era (Darity 2008). Given ongoing inequities in nearly every realm of American life, we aim to calculate the contemporary cost of racial inequity. We contribute to a body of literature concerning the “hidden cost” of being Black by employing a novel strategy and centering a paradigm of intersectionality (Shapiro, 2004; Crenshaw 1991).

We account for the disparities in health and income between Blacks and whites by using the compensating and equivalent surplus frameworks to estimate willingness to accept (WTA) and willingness to pay (WTP). Our preliminary findings, using the Behavioral Risk Factor Surveillance System, suggests the disparity between Blacks and whites are valued at $40,000 per person per year. This estimate can be interpreted as the WTP by an average white person to avoid the disparities in income and health experienced by an average black person. In consideration of overlapping systems of oppression (e.g. racism, sexism), our findings suggest the WTP estimates lost wages and health inequity born by Black women are larger, approximating $46,000 per year. Finally, we find that estimates of WTA are much larger than WTP, which may help us conceptualize the value of white racial privilege.

Health Expenditure, Gender and Rent Seeking in the United States and Other OECD Countries

Mina Baliamoune-Lutz
,
University of North Florida and African Center for Economic Transformation

Abstract

The literature has amply documented that health expenditures in the United States (both as a share of GDP and on a per-capita basis) are significantly higher compared with expenditures in other OECD countries. Yet, the percentage of coverage is lower relative to most other OECD countries, where coverage tends to be universal. At the same time, the U.S. ranks lower than many other OECD countries on several health-related indicators. This is particularly the case for women’s and children’s health. This paper draws on the political science and economics literatures and presents a novel, but simple, theoretical framework relating the impact of rent seeking to the effectiveness of health expenditures for women’s health. Two important results are obtained. First, higher gender inequality is associated with greater degrees of rent seeking. Second, similar to previous findings, in the presence of significant rent-seeking practices, production of a good (or service) that gives rise to positive externalities—in this case health care—can be more suboptimal and cost ineffective relative to the case where rent-seeking is inexistent. I test the predictions of the theoretical framework for a group of OECD countries using data for 1995-2014 along with several indicators (proxies) of women’s health and two indicators of rent seeking. The preliminary empirical results seem to support the theoretical predictions. The implications of the findings are discussed in relation to the Affordable Care Act and the role of competition and reforms that are so much needed in the United States.

The Reparations Bill: Adding Late Charges and Securing a Funding Source

Robert Williams
,
Guilford College

Abstract

This paper offers evidence that even over the past 50 years (1962 to present day) the racial wealth gaps have simply widened; thereby refuting any narrative that the U.S. is moving toward a truly racially-just society. Under these circumstances, only massive transfers of wealth can offer any measure of hope of ending the system of white supremacy.

Past efforts to calculate the reparations bill have estimated compensation for enslavement and Jim Crow segregation. This paper argues that additional charges should be added. Over the past two generations, federal wealth policies in the guise of key federal tax deductions have supported the accumulation of largely White wealth. Continual reductions in the effectiveness of estate and gift taxes have ensured this increased wealth passes across generations with declining hindrance.

Using both Joint Committee of Taxation records and Survey of Consumer Finance data, this paper estimates the disparities in wealth-building support given to White versus Black and Latinx households over the past two generations. It argues why this de jure support for the widening racial wealth gaps should be added to the reparations bill.
By capping or eliminating these tax deductions, the Federal Government could free up hundreds of billions of dollars annually that could serve as one source of the reparations bill.
Discussant(s)
Olugbenga Ajilore
,
University of Toledo
Alberto Ortega
,
Indiana University
Jamein Cunningham
,
University of Memphis
Dania V. Francis
,
University of Massachusetts-Amherst
Fafanyo Asiseh
,
North Carolina A&T State University
JEL Classifications
  • I0 - General
  • J1 - Demographic Economics