Why the Rich drink more but smoke less: The Impact of Wealth on Health Behaviors
AbstractWealthier individuals engage in healthier behavior. This paper seeks to explain this phenomenon by developing a theory of health behavior, and exploiting both lottery winnings and inheritances to test the theory. We distinguish between the direct monetary cost and the indirect health cost (value of health lost) of unhealthy consumption. The health cost increases with wealth and the degree of unhealthiness, leading wealthier individuals to consume more healthy and moderately unhealthy, but fewer severely unhealthy goods. The empirical evidence presented suggests that differences in health costs may indeed provide an explanation for behavioral differences, and ultimately health outcomes, between wealth groups.
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Bibliographic InfoPaper provided by Tinbergen Institute in its series Tinbergen Institute Discussion Papers with number 13-035/V.
Date of creation: 05 Mar 2013
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consumption; health; health capital; health behavior; wealth;
Find related papers by JEL classification:
- D91 - Microeconomics - - Intertemporal Choice - - - Intertemporal Household Choice; Life Cycle Models and Saving
- I10 - Health, Education, and Welfare - - Health - - - General
- I12 - Health, Education, and Welfare - - Health - - - Health Production
- I14 - Health, Education, and Welfare - - Health - - - Health and Inequality
- J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
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- Anita Ratcliffe, 2012. "Wealth Effects or Economic Barometer: Why Do House Prices Matter for Psychological Health?," Working Papers 2012014, The University of Sheffield, Department of Economics.
- Erixson, Oscar, 2014. "Health Responses to a Wealth Shock: Evidence from a Swedish Tax Reform," Working Paper Series 1011, Research Institute of Industrial Economics.
- Titus J. Galama & Hans van Kippersluis, 2013. "Health Inequalities through the Lens of Health Capital Theory: Issues, Solutions, and Future Directions," Tinbergen Institute Discussion Papers 13-076/V, Tinbergen Institute.
- Erixson, Oscar, 2014. "Health responses to a wealth shock: Evidence from a Swedish tax reform," Working Paper Series, Center for Fiscal Studies 2014:3, Uppsala University, Department of Economics.
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