Effectiveness of public health spending on infant mortality in Florida, 2001–2014

Abstract

Studies investigating the effectiveness of public health spending typically face two major challenges. One is the lack of data on individual program spending, which restricts researchers to rely on aggregate expenditures. The other is the failure to address issues of endogeneity and serial correlation between health outcomes and spending. In this study, we demonstrate that the use of specific spending items as opposed to overall spending, combined with Generalized Method of Moments estimation techniques can do a far better job in revealing the effectiveness of public health services on health outcomes. As an example, we consider the effects of infant-related public health programs on infant mortality rates. Focus on programs expressly related to maternal and infant health was made possible by a unique longitudinal dataset from the Florida Department of Health containing information for all 67 Florida counties spanning 2001 through 2014. Our empirical methodology, by addressing potential endogeneity issues along with serial correlation, allows us to estimate the causal impact of specific public health investments in maternal and infant-related programs on infant mortality. We find that a 10 percent increase in targeted public health spending per infant leads to a 2.07 percent decrease in infant mortality rates. We also find that targeted spending may be more effective in reducing infant mortality among blacks than among whites. The use of targeted spending data along with the Generalized Method of Moments technique can provide stronger evidence to guide future resource allocation and policy decisions in public health.