Income, rainfall shocks and health. An instrumental variable approach

D. Savage and Eleonora Fichera

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

Abstract: We examine whether income shocks affect a range of health outcomes and a preventative behaviour. We instrument income with rainfall measurements by matching satellite information on timing and positioning of 21 rainfall stations to longitudinal data (1991-1994) of over 4,000 individuals in 51 villages of a North Western region in Tanzania. We find a pro-cyclical effect of income on health. A ten percent increase in income reduces by 0.2 the number of illnesses. A further finding is the positive effect on vaccinations of children under six: a ten percent increase in income implies an increase of about one vaccination, from a mean of 2.3 per child, for the four vaccinations of polio, tetanus, tuberculosis and measles. There is also some evidence of a reduction in chronic malnutrition of children under six. Our results suggest the income effect to offset the increased opportunity cost of time in this data.

Keywords: Rainfall shocks; Income; Health; Spatial interpolation (search for similar items in EconPapers)
JEL-codes: I12 I14 I18 (search for similar items in EconPapers)
Date: 2013-06
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Citations: View citations in EconPapers (3)

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