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

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  • Mikael Lindahl

Abstract

A vast literature has established a strong positive relation between income and health status and a negative relation with mortality. This paper studies the effects of income on health and mortality, using only the part of income variation due to a truly exogenous factor: monetary lottery prizes of individuals. The findings are that higher income causally generates good health and that this effect is of a similar magnitude as when traditional estimation techniques are used. A 10 percent income increase improves health by about 4–5 percent of a standard deviation.

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Bibliographic Info

Article provided by University of Wisconsin Press in its journal Journal of Human Resources.

Volume (Year): 40 (2005)
Issue (Month): 1 ()
Pages:

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Handle: RePEc:uwp:jhriss:v:40:y:2005:i:1:p144-168

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