Essays on development economics and health economics

In chapter 1, I estimate and decompose the welfare benefit of Thailand's universal health care policy, also known as the “30 Baht program”. The total welfare impact of the 30 Baht program is defined as the amount of consumption that an enrollee would need to give up so as to leave her with the same expected utility as without the 30 Baht program. I find that the total welfare benefit is approximately 75 cents per dollar of government spending. The main source of the welfare effect can be attributed to improved consumption smoothing rather than increases in the consumption level. Using the difference in differences method, I find that the effect of the 30 Baht program on income is significantly positive, while the effect on consumption is slightly negative but not significant. This implies that the 30 Baht program has a positive impact on savings and future consumption, rather than current consumption. In chapter 2, I investigate into the effect of the 30 Bath program on drinking and smoking behaviours. This effect is decomposed into the moral hazard component, the increased utilization component and the increased life expectancy component in the framework. Using Townsend Thai project monthly surveys, I estimate the average treatment effect of the program by difference in differences using households of government employees as the control group. I also use quantile regressions to study the treatment effect heterogeneity. Although the estimated average treatment effects of the 30 Baht program on smoking and drinking behaviours are not statistically significant, the quantile regression estimates suggest that (1) the effects of the program on smoking/drinking expenditure are negative at the 10th percentile, and (2) the 30 Baht program negative affects smoking/drinking expenditure even though the moral hazard component and the increased utilization component are isolated. In chapter 3, with Tenzin Yindok, we investigate into the effect of Thailand's 2003 black market lottery crackdown on households' gambling behaviours and consumption-saving behaviours. We estimate the average treatment effect by difference in differences technique using annual household spending on black market lottery as a continuous treatment variable. We find that the crackdown resulted in a statistically significant decrease in black market lottery activities, and an increase in participation and spending on government lotteries, although this increase is not commensurate with the reduction in black market gambling. Our main results on consumption and saving suggest that households responded to the policy by increasing their savings, without any statistically significant increase in non-gambling related consumption. We further find that the statistically significant and positive result on saving is driven by households in the poorest quintile and households in the richest quintile. The former effect is also the largest in terms of magnitude.