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Income, relative income, and self-reported health in Britain 1979-2000

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  • Hugh Gravelle

    ()
    (National Primary Care Research and Development Centre, Centre for Health Economics, University of York)

  • Matt Sutton

    (Health Economics Research Unit, University of Aberdeen)

Abstract

According to the relative income hypothesis, an individual’s health depends on the distribution of income in a reference group, as well as on the income of the individual. We use data on 231,208 individuals in Great Britain from 19 rounds of the General Household Survey between 1979 and 2000 to test alternative specifications of the hypothesis with different measures of relative income, national and regional reference groups, and two measures of self assessed health. All models include individual education, social class, housing tenure, age, gender and income. The estimated effects of relative income measures are usually weaker with regional reference groups and in models with time trends. There is little evidence for an independent effect of the Gini coefficient once time trends are allowed for. Deprivation relative to mean income and the Hey-Lambert-Yitzhaki measures of relative deprivation are generally negatively associated with individual health, though most such models do not perform better on the Bayesian Information Criterion than models without relative income. The only model which performs better than the model without relative income and which has a positive estimated effect of absolute income on health has relative deprivation measured as income proportional to mean income. In this model the increase in the probability of good health from a ceteris paribus reduction in relative deprivation from the upper quartile to zero is 0.010, whereas as an increase in income from the lower to the upper quartile increases the probability by 0.056. Measures of relative deprivation constructed by comparing individual income with incomes within a regional or national reference group will always be highly correlated with individual income, making identification of the separate effects of income and relative deprivation problematic.

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File URL: http://www.york.ac.uk/media/che/documents/papers/researchpapers/rp10_income_and_self-reported_health.pdf
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Bibliographic Info

Paper provided by Centre for Health Economics, University of York in its series Working Papers with number 010cherp.

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Length: 31 pages
Date of creation: Mar 2006
Date of revision:
Handle: RePEc:chy:respap:10cherp

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Keywords: relative income; relative deprivation; income inequality; health.;

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References

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  1. Andrew E. Clark and Andrew J. Oswald, . "Satisfaction and Comparison Income," Economics Discussion Papers 419, University of Essex, Department of Economics.
  2. Paula K. Lorgelly & Joanne Lindley, 2008. "What is the relationship between income inequality and health? Evidence from the BHPS," Health Economics, John Wiley & Sons, Ltd., vol. 17(2), pages 249-265.
  3. Craig, Neil, 2005. "Exploring the generalisability of the association between income inequality and self-assessed health," Social Science & Medicine, Elsevier, vol. 60(11), pages 2477-2488, June.
  4. Gravelle, Hugh & Wildman, John & Sutton, Matthew, 2002. "Income, income inequality and health: what can we learn from aggregate data?," Social Science & Medicine, Elsevier, vol. 54(4), pages 577-589, February.
  5. Jennifer M. Mellor & Jeffrey Milyo, 1999. "Re-Examining the Evidence of an Ecological Association between Income Inequality and Health," Discussion Papers Series, Department of Economics, Tufts University 9922, Department of Economics, Tufts University.
  6. Ettner, Susan L., 1996. "New evidence on the relationship between income and health," Journal of Health Economics, Elsevier, vol. 15(1), pages 67-85, February.
  7. Hey, John D & Lambert, Peter J, 1980. "Relative Deprivation and the Gini Coefficient: Comment," The Quarterly Journal of Economics, MIT Press, vol. 95(3), pages 567-73, November.
  8. Benzeval, Michaela & Judge, Ken, 2001. "Income and health: the time dimension," Social Science & Medicine, Elsevier, vol. 52(9), pages 1371-1390, May.
  9. Chang, Virginia W. & Christakis, Nicholas A., 2005. "Income inequality and weight status in US metropolitan areas," Social Science & Medicine, Elsevier, vol. 61(1), pages 83-96, July.
  10. Yitzhaki, Shlomo, 1979. "Relative Deprivation and the Gini Coefficient," The Quarterly Journal of Economics, MIT Press, vol. 93(2), pages 321-24, May.
  11. Wilkinson, Richard G & Pickett, Kate E., 2006. "Income inequality and population health: A review and explanation of the evidence," Social Science & Medicine, Elsevier, vol. 62(7), pages 1768-1784, April.
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Cited by:
  1. Adjaye-Gbewonyo, Kafui & Kawachi, Ichiro, 2012. "Use of the Yitzhaki Index as a test of relative deprivation for health outcomes: A review of recent literature," Social Science & Medicine, Elsevier, vol. 75(1), pages 129-137.
  2. Grönqvist, Hans & Johansson, Per & Niknami, Susan, 2012. "Income inequality and health: Lessons from a refugee residential assignment program," Journal of Health Economics, Elsevier, vol. 31(4), pages 617-629.
  3. Huber, Martin & Lechner, Michael & Wunsch, Conny, 2009. "Does Leaving Welfare Improve Health? Evidence for Germany," IZA Discussion Papers 4370, Institute for the Study of Labor (IZA).
  4. Sun, Ping & Unger, Jennifer B. & Palmer, Paula & Ma, Huiyan & Xie, Bin & Sussman, Steve & Johnson, C. Anderson, 2012. "Relative income inequality and selected health outcomes in urban Chinese youth," Social Science & Medicine, Elsevier, vol. 74(1), pages 84-91.
  5. Kuo, Chun-Tung & Chiang, Tung-liang, 2013. "The association between relative deprivation and self-rated health, depressive symptoms, and smoking behavior in Taiwan," Social Science & Medicine, Elsevier, vol. 89(C), pages 39-44.
  6. Cristina Blanco Pérez & Xavier Ramos, 2010. "Polarization And Health," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 56(1), pages 171-185, 03.
  7. Karlsdotter, Kristina & Martín Martín, José J. & López del Amo González, M. Puerto, 2012. "Multilevel analysis of income, income inequalities and health in Spain," Social Science & Medicine, Elsevier, vol. 74(7), pages 1099-1106.
  8. Distante, Roberta, 2010. "Subjective well-being, income and relative concerns in the UK," MPRA Paper 30786, University Library of Munich, Germany.
  9. Andrew M. Jones & Stefanie Schurer, 2011. "How does heterogeneity shape the socioeconomic gradient in health satisfaction?," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 26(4), pages 549-579, 06.
  10. Joan Costa-i-Font & Cristina Hernandez-Quevedo & Azusa Sato, 2013. "A 'Health Kuznets' Curve'? Cross-Country and Longitudinal Evidence," CESifo Working Paper Series 4446, CESifo Group Munich.

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