Abstract
We investigate the causal impact of preventative health behaviour of an individual, colon screening, on health outcomes and healthcare utilisation. We employ an instrumental variable approach to address the circularity in this relationship, using eye examination as our instrument. Our instrument exploits the fact that individuals who comply with recommendations or exhibit positive health behaviours tend to cluster and comply with recommendations or guidelines for other positive health behaviours as well. We use two-stage least square regressions using data from the Survey of Health, Ageing and Retirement in Europe for Waves 8 and 9. The results show that undertaking colon screening increases the probability of hospitalisations, especially those that are planned. It also leads to an increase in the probability of a diagnosis of cancer and colon cancer, while reducing the probability of death in the subsequent period. Heterogeneity checks provide evidence that these results are driven mostly by females, unmarried individuals, those with more than two co-morbidities and individuals with lower education and income. The results highlight the need for promoting selective information and targeted preventive medicine to enhance early detection of cancer which may increase the probability of survival, and reduce avoidable burden on the healthcare system, especially, amongst the vulnerable groups.