Causal Effects of Health Shocks on Consumption and Debt: Quasi-Experimental Evidence from Bus Accident Injuries

Manoj Mohanan ()

The Review of Economics and Statistics, 2013, vol. 95, issue 2, 673-681

Abstract: Endogeneity between health and wealth presents a challenge for estimating causal effects of health shocks. Using a quasi-experimental design, comprising exogenous shocks sustained as bus accident injuries in India, with controls drawn from travelers on the same bus routes one year later, I present new evidence of causal effects on consumption and debt. Using primary household survey data, I find that households faced with shock-related expenditures are able to smooth consumption on food, housing, and festivals, with small reductions in educational spending. Debt was the principal mitigating mechanism households used, leading to significantly larger levels of indebtedness. © 2013 The President and Fellows of Harvard College and the Massachusetts Institute of Technology.

Keywords: health shocks; consumption; debt; bus accidents; injuries; India (search for similar items in EconPapers)
JEL-codes: D1 D12 D91 I10 I30 (search for similar items in EconPapers)
Date: 2013
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Working Paper: Causal Effects of Health Shocks on Consumption and Debt: Quasi-Experimental Evidence from Bus Accident Injuries (2011)
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