The Economics of Pain

Joshua Tibbitts

doi:10.7273/000001861

This dissertation consists of two essays focusing on the economics of pain and choice and an essay exploring a gender wage gap among staff employees at WSU. The first essay investigates the relationship between opioid diverting policy and suicides among the veteran population. In 2013, the Veterans Health Administration (VA) implemented the Opioid Safety Initiative (OSI) with the goal of discouraging prescription opioids dispensed to VA patients. Because this involved the aggressive curtailing of opioid prescriptions for many VA patients, OSI may have had a detrimental effect on veterans’ mental health leading to suicide in extreme cases. The result of this study finds that OSI raised the veteran suicide rate relative to the civilian rate with rural veterans suffering the lion’s share of the increase. In particular, OSI raised the rural veteran suicide rate by roughly one-third within the first year of implementation (2013) and by 45 percent by 2016. The second essay is a theoretical investigation of pain and addiction. Pain and addiction are complements. Individuals who suffer from pain, either physical or mental, may use analgesic substances to reduce their pain. If the analgesic has addictive properties, then individuals may become subject to dependence and possibly addiction. This circumstance represents a dilemma for those attempting to cope with their pain: a tradeoff between pain, dependence, and addiction. The model in this paper presents a deterministic rational-choice model in which an agent’s pain evolves intertemporally as a function of intake of an addictive analgesic. Consumption of this analgesic alleviates pain, while contributing to potential addiction; investments towards therapy ameliorates addiction. We find that consumption of therapy is incentivized after an addiction process is triggered, which has important policy implications. The third essay uses a hedonic wage regression to investigate gender salary disparities between male and female staff employees at Washington State University. Estimates in this paper show that there exists a prominent gender wage gap, where women on average earn between 8.1 and 13.7 percent less than their male counterparts. Although female staff earn less than men on average, we find that there is parity in annual salary increases.

The Economics of Pain

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