Disentangling the relationship between health and income

Andrew Jones and John Wildman

Health, Econometrics and Data Group (HEDG) Working Papers from HEDG, c/o Department of Economics, University of York

Abstract: The nature of the relationship between health and income is still not clearly defined. It is believed that personal income affects health but this may not be the end of the story. Income may also play its part through issues of relativity and deprivation. It may even be possible that these latter indirect effects are more important determinants of health than individual income. This paper investigates these issues by focusing on the relationship between income and health. The models are estimated using parametric and semiparametric panel data frameworks in order to ameliorate problems of misspecification and unobservable heterogeneity. The results demonstrate strong evidence for income affecting health but limited evidence for relative deprivation.

Keywords: Health production; panel data; semiparametric methods; absolute income; relative deprivation (search for similar items in EconPapers)
JEL-codes: C14 C23 I12 (search for similar items in EconPapers)
Date: 2005-10
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Citations: View citations in EconPapers (11)

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