Social and Economic Dimensions of an Aging Population


Vol. 4 No. 2

Summer 2002

SEDAP (Social and Economic Dimensions of an Aging Population) is a multidisciplinary research program studying a wide range of aging-related issues and is funded by the Social Sciences and Humanities Research Council of Canada. SEDAP is centred at McMaster University and involves researchers from that institution as well as from the University of British Columbia, Université de Montréal, Queen's and the University of Toronto.


I. SEDAP Conference on Health and Aging : First Call for Papers

October 18 to 20, 2002 at the Donald Gordon Conference Centre, Queen's University, Kingston, Ontario

SEDAP members and others interested in presenting papers at the SEDAP Conference on Health and Aging are invited to submit titles and abstracts of approximately 100 words as soon as possible but no later than September 15, 2002. Electronic submissions of abstracts are preferred.

All sessions will be held at the Donald Gordon Conference Centre at Queen's University. The conference will open with a plenary session Friday evening, October 18 followed by a reception. Sessions will be held all day Saturday, October 19 and Sunday morning, October 20, ending at lunch time. Registration fees are $100 for non-SEDAP members. There is no registration fee for students.

A block of rooms has been reserved at the Donald Gordon Conference Centre for overnight guests at a rate of $90 per night plus taxes based on single room occupancy. The Donald Gordon Conference Centre should be contacted directly to reserve your room. They can be contacted by telephone at 613-533-2221, fax 613-533- 2915 or e-mail.

For additional information about the conference or to submit an abstract or registration fees, please contact
Dr. Mark W. Rosenberg, Department of Geography
Queen's University, Kingston, Ontario, K7L 3N6
tel: 613-533-6046
fax: 613-533-6122
e-mail: M Rosenberg

II. SEDAP Research Papers

SEDAP Research Papers are available on the SEDAP website at no cost. Paper copies may be obtained for a nominal charge. Please contact Mrs. Gail Kalika, Department of Economics, KTH-426, McMaster University, Hamilton, Ont., Canada, L8S 4M4.

Brief descriptions follow of the most recently released papers in the SEDAP series.

SEDAP Research Paper No. 70:

The Impact of Reference Pricing of Cardiovascular Drugs on Health Care Costs and Health Outcomes: Evidence from British Columbia - Volume I: Summary

Paul V. Grootendorst (Clinical Epidemiology and Biostatistics, McMaster University), Lisa R. Dolovich (Centre for Evaluation of Medicines, Hamilton, Ont.), Anne M. Holbrook (Centre for Evaluation of Medicines, Hamilton, Ont.), Adrian R. Levy (Centre for Health Evaluation and Outcome Sciences, Vancouver, B.C.) and Bernie J. O'Brien (Clinical Epidemiology and Biostatistics, McMaster University)

SEDAP Research Paper No. 71:

The Impact of Reference Pricing of Cardiovascular Drugs on Health Care Costs and Health Outcomes: Evidence from British Columbia - Volume II: Technical Report

Paul V. Grootendorst (Clinical Epidemiology and Biostatistics, McMaster University), Lisa R. Dolovich (Centre for Evaluation of Medicines, Hamilton, Ont.), Anne M. Holbrook (Centre for Evaluation of Medicines, Hamilton, Ont.), Adrian R. Levy (Centre for Health Evaluation and Outcome Sciences, Vancouver, B.C.) and Bernie J. O'Brien (Clinical Epidemiology and Biostatistics, McMaster University)

SEDAP Research Paper No. 72:

The Impact of Reference Pricing of Cardiovascular Drugs on Health Care Costs and Health Outcomes: Evidence from British Columbia - Volume III: ACE and CCB Literature Review

Lisa R. Dolovich (Centre for Evaluation of Medicines, Hamilton, Ont.), Anne M. Holbrook (Centre for Evaluation of Medicines, Hamilton, Ont.) and Margaret Woodruff (Centre for Evaluation of Medicines, Hamilton, Ont.)

The research study described by SEDAP Research Papers Nos. 70, 71 and 72 is an examination of the effects of reference pricing. Reference pricing (RP) has been adopted both domestically and internationally as a means of limiting expenditures on drug subsidy and insurance programs. RP limits the reimbursement of a group of drugs with similar therapeutic effect but different active ingredients to a fixed "reference price", typically based on an average of the lowest cost "reference standard" drugs within the group. Drug program beneficiaries have the option of paying out-of-pocket the difference between the retail price and the reference price for partially subsidized drugs.

RP has been introduced by the British Columbia Ministry of Health Pharmacare program, the provincial governmlent drug subsidy program for seniors and others. Critics of RP contend that partially subsidized and fully subsidized (reference standard) drugs are not therapeutically interchangeable, and therefore patient health will be compromised and use of physicians' and hospital services may increase as a result. The authors investigate here whether RP has reduced Pharmacare drug expenditure without adversely affecting patient health status or increasing expenditures on physicians' and hospital-based services. The group of drugs they study are nitrates, angiotensin-converting- enzyme (ACE) inhibitors, and dihydropyrdine calcium channel blockers (CCBs).

The authors estimate that reference pricing of the nitrates, ACE inhibitors, and CCB drug classes reduced Pharmacare expenditures on its seniors' drug plan by $23.8 to $24.8 million between October 1995 and May 1999. This translates into annualized savings of approximately $7.7 million (or 3.6 percent of 1997 Pharmacare drug expenditures for seniors). About 24 percent of these savings represent additional costs to seniors who elected to pay for higher cost drugs. The authors found no evidence of an increase in rates of mortality associated with cardiovascular or renal disorders, nor evidence of an increase in the rates of longterm care admissions.

SEDAP Research Paper No. 70 provides a summary of the research and its results. Paper No. 71 gives the technical results of the study, primarily in table and figure form. Paper No. 72 gives a detailed summary of the literature searches used in the study.

SEDAP Research Paper No. 73:

Do Drug Plans Matter? Effects of Drug Plan Eligibility on Drug Use Among the Elderly, Social Assistance Recipients and the General Population

Paul Grootendorst and Mitchell Levine (Clinical Epidemiology and Biostatistics, McMaster University)

Each provincial government in Canada has established some form of drug insurance program for selected beneficiary groups, including seniors, those on social assistance and those residing in long-term care facilities. A private insurance system is available for the remaining population. The authors use data from the 1994 and 1996 Statistics Canada National Population Health Survey to examine a number of drug insurance issues, including the socio-economic and demographic determinants of private drug insurance coverage and the effects of copayment charges for prescription drugs paid by senior and social assistance beneficiaries of provincial drug plans.

Among the findings of the study are that the most important determinants of drug insurance coverage are household income (the higher the income, the greater the likelihood of having private coverage), occupation (with the highest rates of coverage among technicians, high level management and full time students), and province of residence (with the highest rates of coverage in Alberta and Ontario and the lowest in Saskatchewan).

With regard to the price paid for prescription drugs, social assistance recipients are substantially more price responsive than are seniors and those in the general population. Social assistance recipients' drug use was sensitive to price variations in the range of $0 to $6, and thus individuals with low income do not necessarily need to face substantial drug charges for them to relinquish prescription medicines. No evidence was found that seniors' price sensitivity varies with income. However, it is possible that current household income is a less useful measure of ability to pay for seniors than are other measures such as accumulated assets.

SEDAP Research Paper No. 74:

Living Alone and Living With Children: The Living Arrangements of Canadian and Chinese-Canadian Seniors

Michael A. Pacey ( Department of Geography, Queen's University)

This paper explores the living arrangements of seniors in Canada, with a particular focus on Chinese-Canadian seniors. Although Chinese-Canadian seniors in Canada represent only about 2 percent of all seniors, nearly half of them have immigrated to Canada at age 60 or older and thus may have different experiences of aging than do other senior groups in Canada.

The author uses three data sources in this study. The 1996 Census Public-Use Microdata file (PUMF) has a very large sample size and contains a wide variety of economic and social data but has no data on health status. The 1996-97 National Population Health Survey (NPHS) is a smaller sample without strong economic and ethnic data but does provide health status information. The 1996 General Social Survey (GSS) has some information on health, personal data and social networks. All three sources are used for descriptive analysis; more complex modeling uses only the PUMF and GSS.

Among the paper's findings are the following:

SEDAP Research Paper No. 75:

Student Enrolment and Faculty Recruitment in Ontario: The Double Cohort, the Baby Boom Echo, and the Aging of University Faculty

Byron G. Spencer (Department of Economics, McMaster University)

This paper is a revised version of SEDAP Research Paper No. 61 of the same title. (Paper No. 61 was described in SEDAP Bulletin Vol. 3 No. 4, Winter 2001/2002). The present study incorporates an additional year of data (relating to the academic year 1999-2000) and now includes some smaller university-level institutions that had been inadvertently omitted from the earlier study. Some equations in the model have also been respecified.

Numerical results in this version of the study differ very slightly from those of the previous version and the conclusions of the study remain the same. The author finds that recruitment of new faculty in unprecedented numbers - about 7,000 by 2004 and another 2,000 by 2010, as compared to the current total size of about 12,000 - will be essential if the university system at the end of this decade is to have standards even close to those now in place. Eliminating mandatory retirement could reduce the need for recruitment by about one-sixth.

SEDAP Research Paper No. 76:

Gender Differences in the Influence of Economic, Lifestyle, and Psychosocial Factors on Later-life Health

Steven G. Prus (Department of Sociology and Anthropology, Carleton University) and Ellen Gee (Department of Sociology and Anthropology, Simon Fraser University)

The authors begin by noting that research on gender differences in health tends to show that women are more likely than men to experience morbidity and disability, but that they have lower rates of mortality. Such gender disparities likely reflect both biological and social factors, and it is an examination of these social factors on the health of Canadians aged 65 and over that is the focus of this paper.

The data used in this study are from the cross-sectional household component of the 1994-95 National Population Health Survey (the only NPHS survey that contains a comprehensive set of psychosocial- resource indicators). Health status is measured in two ways: subjective health status is based on the question, "In general, would you say your health is poor, fair, good very good or excellent?" and objective health status is based on a respondent's answers to questions about functional health and ability.

A number of non-health variables are considered in this study. Income per household member and education level are used as indicators of socio-economic status. Lifestyle/behaviour indicators used are the Body Mass Index and the number of years spent as a smoker. Psychosocial variables include: a social support index, which comprises four items that reflect whether respondents feel that they have someone to confide in, to count on, to advise them and to make them feel loved; whether the person lives alone, with a spouse or in other arrangements; the "recent life events" index, based on the number of negative events the respondent or someone close to the respondent experienced in the 12 months prior to the interview; and a variety of chronic stressors, measured as present or absent. Age is also included in the analysis.

The authors note several limitations of the study. First, the gender bias in mortality (i.e. men compared to women at middle ages being more likely to suffer from life-threatening conditions and thus having a higher probability of being deceased by old age) may produce a healthier population of elderly men. Second, since the data are based on a subject's response to health-related questions, observed gender differences in health may be attributable to gender differences in reporting behaviour. Third, it is difficult in this study to establish causality between social variables and health due to the cross-sectional nature of the data.

The authors find that:

SEDAP Research Paper No. 77:

Asking Consumption Questions in General Purpose Surveys

Martin Browning (Centre for Applied Microeconometrics, University of Copenhagen) Thomas F. Crossley (Department of Economics, McMaster University) and Guglielmo Weber (Department of Economics, Padua University)

Information on household expenditure has numerous research uses, including tracking changes in the distribution of material living standards over time or examining the impact of policy changes on the material well- being of different households. It is unlikely that researchers will ever be able to design a set of questions that is succinct enough to be included in most surveys and also comprehensive enough to meet most research needs. While the inclusion of some consumption questions in general purpose surveys is potentially very valuable, there is also the need to design consumption questions for more tightly focused surveys and the latter type of survey is the main focus of this paper.

Asking a single broad "total expenditure" question has obvious attractions if researchers are interested in total expenditure but there are significant problems. For example, there are differing rates of response to such broad questions, with higher rates of response when the respondent is the primary earner in the household and much more non- response when the respondent lives in a composite household (that is, in a household which comprises individuals other than either a single person, a couple, or a couple and their children). As well, responses to total expenditure questions tend to display considerable rounding.

Other methods that can be used to recover total expenditures are based on asking questions concerning expenditures on sub-items of the total, such as food, clothing and utilities. The issues here are which sub- items to choose and the appropriate level of disaggregation. For example, if one were sampling the elderly, then one might want to include out-of-pocket medical expenditures; a study of younger people might explicitly mention items such as schooling or child-care expenses.

The authors examine a number of consumption surveys from various (high-income) countries and make the following recommendations:

The paper concludes by noting that while many researchers are pessimistic about the possibility of recovering useful expenditure information from broader general purpose surveys, the authors themselves do not share this pessimism.

SEDAP Research Paper No. 78:

A Longitudinal Study of the Residential Mobility of the Elderly in Canada

Yuri Ostrovsky (Department of Economics, York University)

Much of the debate about the housing decisions of the elderly concerns the role of housing wealth in the lifecycle consumption/ savings decision of the household. An important question in this debate is whether housing wealth is viewed by households as a financial asset that will be used to support general consumption after retirement. If so, then we should observe reduction in housing wealth after retirement, unless households are unable - due to high financial and psychological costs of moving - to release their housing equity.

The residential mobility of elderly households is directly linked to the question of housing adjustment in later life. Changes in the amount of housing consumption are usually observed as a two-step process: (1) a decision to move followed by (2) changes in housing consumption conditional on moving. In this study, the author concentrates on the first step and investigates the factors influencing household decisions to move in the context of a dynamic approach using panel data from Statistics Canada's Survey of Labour and Income Dynamics (SLID). Unfortunately, the SLID does not provide the necessary information to investigate the second step, the issue of changes in housing consumption.

The SLID was designed to have rotating overlapping panels, with each new six-year panel starting halfway through the span of the previous one. The first panel was introduced in 1993 and the second in 1996. The data used in this study are drawn from the first four years (1996-1999) of the second panel, as some key variables were not introduced until the second panel. Selecting the highest income earner in the household aged 60 or older in 1996 gives a sample of 1622 men and 1200 women. One drawback of the SLID data is that it is only known whether a person moved in a given year but not how many times that person may have moved in that year.

The author finds no strong support for the prediction of a simple lifecycle model that the residential mobility of the elderly is primarily motivated by the desire to consume out of housing wealth. In particular, one result is that proportionally more elderly who were non-owners at the beginning of the study became owners than vice versa. The author also finds that those with lower moving costs - non-owners, single people and urban dwellers - are more likely to move than are those with higher moving costs. The results indicate a response to changes in housing prices that is stronger than has previously been found in the literature, particularly for owners.

editor: Deb Fretz -
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Last revised: Jul 25, 2002.