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Valuing Health Conditions - Insights from Happiness Surveys across Countries and Cultures

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Author Info

  • Carol Graham
  • Lucas Higuera
  • Eduardo Lora

    ()

Abstract

This paper assesses the effects of different health conditions on happiness. Based on a large data set for Latin America, the effects of different conditions are examined across age, gender, and income cohorts. Anxiety and pain have stronger effects than physical problems, likely because people can adapt better to one-time shocks than to constant uncertainty. The negative effects of health conditions are very large when compared to the effects of income on happiness. While higher peer income typically elicits envy, better peer health provides positive signals for life and health satisfaction. Nonetheless, health norms vary widely across countries. The results suggest that the life satisfaction approach applied to surveys of health may contribute to better health expenditure and policy decisions.

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Bibliographic Info

Paper provided by Inter-American Development Bank, Research Department in its series Research Department Publications with number 4635.

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Date of creation: Jul 2009
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Handle: RePEc:idb:wpaper:4635

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Keywords: Happiness; Health economics; Public policy; Surveys;

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References

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  1. Blanchflower, David G. & Oswald, Andrew J., 2001. "Well-Being Over Time in Britain and the USA," The Warwick Economics Research Paper Series (TWERPS) 616, University of Warwick, Department of Economics.
  2. Alesina, Alberto F & Di Tella, Rafael & MacCulloch, Robert, 2001. "Inequality and Happiness: Are Europeans and Americans Different?," CEPR Discussion Papers 2877, C.E.P.R. Discussion Papers.
  3. Kapteyn, A. & Smith, J.P. & Soest, A.H.O. van, 2007. "Vignettes and self-reports of work disability in the United States and the Netherlands," Open Access publications from Tilburg University urn:nbn:nl:ui:12-210598, Tilburg University.
  4. Erzo F. P. Luttmer, 2005. "Neighbors as Negatives: Relative Earnings and Well-Being," The Quarterly Journal of Economics, MIT Press, vol. 120(3), pages 963-1002, August.
  5. Angus Deaton, 2007. "Income, Aging, Health and Wellbeing Around the World: Evidence from the Gallup World Poll," NBER Working Papers 13317, National Bureau of Economic Research, Inc.
  6. Carol Graham & Andrew Felton, 2006. "Inequality and happiness: Insights from Latin America," Journal of Economic Inequality, Springer, vol. 4(1), pages 107-122, April.
  7. Paul Dolan & Daniel Kahneman, 2008. "Interpretations Of Utility And Their Implications For The Valuation Of Health," Economic Journal, Royal Economic Society, vol. 118(525), pages 215-234, 01.
  8. Andrew Clark, 2001. "Unemployment As A Social Norm: Psychological Evidence from Panel Data," DELTA Working Papers 2001-17, DELTA (Ecole normale supérieure).
  9. Graham, Carol & Eggers, Andrew & Sukhtankar, Sandip, 2004. "Does happiness pay?: An exploration based on panel data from Russia," Journal of Economic Behavior & Organization, Elsevier, vol. 55(3), pages 319-342, November.
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