Three Essays on Health Economics

This dissertation consists of three essays. The first essay studies the quantity-quality tradeoff by studying China’s one child policy. We utilize the community-level variations in China’s One-Child Policy to isolate the actual effects of number of children on the quality of children. Based on the instrumental variable approach, we find that having a second child has significantly decreased the height of the first child, but had no impact on the weight status of the first child. And this quality quantity tradeoff only exists among girls, but not for boys, which indicates a son preference in China. By study the underlying mechanism, we find that it is the nutrition intake that may explain this quantity-quality tradeoff among children.The second paper focuses on the financial impacts of ambulatory surgery centers on general surgical hospitals. Ambulatory surgery centers (ASCs), which treat surgical patients who do not need an overnight stay, are a health care service innovation that has proliferated in the United States (U.S.) in the past four decades. This paper examines the effect of ASCs on net patient revenues and total operating costs of hospitals. My major contribution is to use an exogenous instrumental variable which is the product of change in the over 65 years of age population at the county level over the years studied and change in the average Medicare payment rate for all ASCs\u27 procedures over the same years. The results of two-stage least squares suggest that both hospital revenue and operating expenses will increase when ASCs enter the market, with operating expense increasing more, resulting in a decrease in profit margin. I also find that this negative financial impact likely comes from the change in hospital inpatient-severity mix upon ASCs\u27 entry.The third paper is to assess the effectiveness of Hospital Readmissions Reduction Program (HRRP) program implemented in 2012 in the short run by focusing on the acute myocardial infarction (AMI) and heart failure (HF) patients. By using a difference in difference method, I find that HRRP is not effective in the short run in reducing the readmission in three quarters after the program was implemented