Income, Income Inequality and Health: What Can We Learn from Aggregate Data?

NEP-HEA Working Paper No. 2000-06-29

30 Pages Posted: 27 Nov 2000

See all articles by Hugh Gravelle

Hugh Gravelle

University of York, Centre for Health Economics

John Wildman

University of York - Department of Economics and Related Studies

Matthew Sutton

University of Aberdeen - Health Economics Research Unit

Abstract

It has been suggested that, especially in countries with high per capita income, there is an independent effect of income distribution on the health of individuals. One source of evidence in support of this relative income hypothesis are analyses of aggregate cross section data on population health, per capita income and income inequality. We examine the empirical robustness of cross-section analyses by using a new data set to replicate and extend the approach in a frequently cited paper. We find that the estimated relationship between income inequality and life expectancy is dependent on the data set used, the functional form estimated and the way in which the epidemiological transition is specifed. The association is never significant in any of our models. We argue there are serious methodological difficulties in using aggregate cross sections as means of testing hypotheses about the effect of income, and its distribution, on the health of individuals.

JEL Classification: I11, I12

Suggested Citation

Gravelle, Hugh S. and Wildman, John and Sutton, Matthew, Income, Income Inequality and Health: What Can We Learn from Aggregate Data?. NEP-HEA Working Paper No. 2000-06-29. Available at SSRN: https://ssrn.com/abstract=237574 or http://dx.doi.org/10.2139/ssrn.237574

Hugh S. Gravelle (Contact Author)

University of York, Centre for Health Economics ( email )

Alcuin A Block
University of York
York, YO10 5DD
United Kingdom

John Wildman

University of York - Department of Economics and Related Studies ( email )

Heslington
York, YO1 5DD
United Kingdom

Matthew Sutton

University of Aberdeen - Health Economics Research Unit ( email )

United Kingdom
+44 (0)1224-553480/553733 (Phone)
+44 (0)1224-550926 (Fax)

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