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Estimating the Effect of Income on Health and Mortality Using Lottery Prizes as Exogenous Source of Variation in Income

51 Pages Posted: 16 Feb 2002  

Mikael Lindahl

University of Bonn; IZA Institute of Labor Economics

Date Written: February 2002

Abstract

A vast literature has established a strong positive association of income with health status and a negative association with mortality. This paper studies the effects of income on health and mortality, using only the part of income variation that is due to a truly exogenous factor: the monetary lottery prizes of individuals. The findings are that higher income causally generates good health and that this effect is of similar magnitude as when traditional estimation techniques are used. A 10 percent increase in income increases good health by about 0.01-0.02 standard deviations.

Keywords: Health, Mortality, Income, Lottery

JEL Classification: D31, I12

Suggested Citation

Lindahl, Mikael, Estimating the Effect of Income on Health and Mortality Using Lottery Prizes as Exogenous Source of Variation in Income (February 2002). IZA Discussion Paper No. 442. Available at SSRN: https://ssrn.com/abstract=300662

Mikael Lindahl (Contact Author)

University of Bonn ( email )

Postfach 2220
Bonn, D-53012
Germany

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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