Essays in Applied Microeconomics

My dissertation comprises three essays in applied microeconomics. They mostly focused on the evaluation and recommendation of policy issues in the fields of health economics and labor economics, with a direct objective toward to alleviate inequality, and to promote efficient and effective economic policies. The first essay studies how the coverage of health insurance can contribute to obesity (BMI index). First, I extend the the theoretical model of Ehrlich and Becker (1972) to find the relationship between health insurance and obesity; and then supplement the theoretical findings with empirical evidence, using BRFSS data from 2001to 2011 among American young adults. IV regression approach and Lewbel IV (2007) techniques were used to estimate the relationship. The results show that a mere switch from from no health insurance to having insurance is associated with a decrease in BMI of 0.188 kg/m2; which means a weight loss of 1.33 pounds. The second essay explores the possible determinants of out-of-pocket healthcare expenditure (OOPHE) and catastrophic expenditure (CE) in a developing Asian country setting, utilizing a nationally representative random sample of 12,240 households from Bangladesh. Using a Double Hurdle model (Cragg, 1971) approach, I analyze what are the major socioeconomic, demographic and regional factors that are possible determinants of OOPHE and CE. Contrary to common perception that the decesion of whether to spend on healthcare services and how much to spend depend primaily on an individual\u27s health and illness, my analysis shows that illness is but one of the many many factors involved in demand for healthcare. Other influences, such as household characteristics, level of education, types of medical consultants, location, and wealth variable plays a significant role. In addition, expenditure on pharmaceutical drugs is the major component (57%-72%) of healthcare expenditure, and rural households are more likely to suffer CE. Lastly, the third essay studies the empirical evaluations of the effectiveness of reservation policies in Indian labor market. The effectiveness of such prejudicial treatment policies was measured by comparing the relative performance of wage differencials as well as returns to educational attainment accross social caste structure. The study shows that the effectiveness of such policies was positive across all socials groups, although its effect has not been uniform across social structure and in addition, the trend indicates a general decline in benefits of such policies enacted in favor of underprivileged social groups over the survey years. Given the findings, the issue of prejudicial treatment policies still have immense importance from a government policy perspective