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The Role of Desicion Making Processes in the Correlation between Wealth and Health

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Author Info

  • Binswanger, J.
  • Carman, K.G.

    (Tilburg University, Center for Economic Research)

Abstract

There are many pathways explaining the relationship between socioeconomic status and health; one possibility is that some normally unobservable characteristic causes people to invest both in their financial well-being and their health. Here we consider the possibility that the decision making processes are similar across domains and that the steps individuals take to make decisions can help to explain the correlation in outcomes across domains. We focus particularly on retirement savings decisions and decisions in the health domain. Choices in both domains have long-term consequences and therefore require foresight and the ability to process complex information. Our results suggest that up to 44% of the correlation between wealth and health is due to the processes that people use to make these choices.

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Bibliographic Info

Paper provided by Tilburg University, Center for Economic Research in its series Discussion Paper with number 2011-005.

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Date of creation: 2011
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Handle: RePEc:dgr:kubcen:2011005

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Web page: http://center.uvt.nl

Related research

Keywords: Health; Wealth; Decision Making;

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Cited by:
  1. Binswanger, J. & Carman, K.G., 2010. "The Miracle of Compound Interest: Does our Intuition Fail?," Discussion Paper 2010-137, Tilburg University, Center for Economic Research.

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