Evaluating the Role of Individual Specific Heterogeneity in the Relationship between Subjective Health Assessments and Income

45 Pages Posted: 19 Oct 2013

See all articles by Iván Fernández‐Val

Iván Fernández‐Val

Boston University - Department of Economics

Yevgeniya Savchenko

Georgetown University; World Bank

Francis Vella

Georgetown University; IZA Institute of Labor Economics

Abstract

This paper investigates the impact of income on an individual's subjective self-assessment of own health. We employ recently developed methods in the non linear panel data literature to account for the endogeneity of income and the presence of individual heterogeneity. We examine a panel data set of individuals living in Australia and find no statistically significant relationship between income and health responses. Moreover, the evidence suggests that the variation in the individual specific effects, comprising both observed and unobserved time invariant factors, is primarily responsible for the variation across individuals' responses.

Keywords: subjective health assessments, non linear panel data models, fixed effects

JEL Classification: I12, C33, C35

Suggested Citation

Fernandez-Val, Ivan and Savchenko, Yevgeniya and Vella, Francis, Evaluating the Role of Individual Specific Heterogeneity in the Relationship between Subjective Health Assessments and Income. IZA Discussion Paper No. 7651, Available at SSRN: https://ssrn.com/abstract=2342523

Ivan Fernandez-Val (Contact Author)

Boston University - Department of Economics ( email )

270 Bay State Road
Boston, MA 02215
United States

HOME PAGE: http://people.mit.edu/ivanf

Yevgeniya Savchenko

Georgetown University ( email )

Washington, DC 20057
United States

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

HOME PAGE: http://web.worldbank.org/WBSITE/EXTERNAL/WBI/WBIPROGRAMS/ICLP/0,,contentMDK:20993220~pagePK:64156158

Francis Vella

Georgetown University ( email )

Washington, DC 20057
United States
202-687-5573 (Phone)

HOME PAGE: http://explore.georgetown.edu/people/fgv/

IZA Institute of Labor Economics

Schaumburg-Lippe-Str. 7 / 9
Bonn, D-53072
Germany

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