Mental health, subjective well-being, and household health investment

Xinjian Wang, Xuyang Jiao, Jiang Zhang and Ling Huang

Finance Research Letters, 2025, vol. 72, issue C

Abstract: Understanding how psychological factors influence health behaviors remains a critical gap in health economics research, particularly in rapidly developing economies like China. While studies have examined economic determinants of health investment, the role of mental well-being in shaping health expenditure decisions remains underexplored, especially across different income groups. Using the China Family Panel Studies 2020 dataset (n=8,843), we employ regression analyses with instrumental variables and heterogeneity tests to investigate how mental health affects household health investment patterns. Our findings reveal that better mental health significantly increases health-related expenditures, with stronger effects among lower-income households. Subjective well-being partially mediates this relationship, while socioeconomic factors, particularly education and household registration status, show varying impacts across income levels. These results suggest that psychological well-being plays a crucial role in health investment decisions, especially for resource-constrained households, highlighting the need for income-sensitive health promotion strategies in developing economies.

Keywords: Mental health; Health investment; Subjective well-being; Income heterogeneity; Chinese households (search for similar items in EconPapers)
JEL-codes: D91 H51 I12 I31 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:72:y:2025:i:c:s1544612324015083

DOI: 10.1016/j.frl.2024.106479

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