Housing Wealth, Health and Deaths of Despair

33 Pages Posted: 4 Mar 2017 Last revised: 1 Apr 2018

Ariadna Jou

University of Navarra, IESE Business School

Núria Mas

University of Navarra - IESE Business School

Carles Vergara-Alert

University of Navarra - IESE Business School

Date Written: March 22, 2018

Abstract

The debate on the impact of economic conditions on health has been recently amplified by the drug crisis in the US attributed by some to “deaths of despair.” There is little understanding of the magnitude of the impact of economic conditions on health and the reasons why it varies across socioeconomic groups and geographical areas. We show that housing is an important unexplored driver that explains these differences. We exploit the fact that households that overvalue (undervalue) their houses experience an unexpected negative (positive) shock in their housing wealth when they sell their houses. We find that a one standard deviation positive shock in housing wealth increases the probability of an improvement in self-reported health by 1.13 percentage points and decreases the drug-related mortality rate by 0.27. We exploit the geographical variation in unexpected housing wealth shocks and find that households who live in MSAs with more inelastic housing supply experience larger changes in health outcomes.

Keywords: Health, Wealth, Housing, Misestimation, Households

JEL Classification: I10, R20, R30, R31, D10

Suggested Citation

Jou, Ariadna and Mas, Núria and Vergara-Alert, Carles, Housing Wealth, Health and Deaths of Despair (March 22, 2018). Available at SSRN: https://ssrn.com/abstract=2925909 or http://dx.doi.org/10.2139/ssrn.2925909

Ariadna Jou

University of Navarra, IESE Business School ( email )

Avenida Pearson 21
Barcelona, 08034
Spain

Núria Mas

University of Navarra - IESE Business School ( email )

Avenida Pearson 21
Barcelona, 08034
Spain

Carles Vergara-Alert (Contact Author)

University of Navarra - IESE Business School ( email )

Av. Pearson 21
Barcelona, 08034
Spain
+34 932544200 (Phone)
+34 932534343 (Fax)

HOME PAGE: http://web.iese.edu/cvergara/

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