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

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Author Info
Lindahl, Mikael () (University of Amsterdam and IZA, Bonn)

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Abstract

A vast literature has established a strong positive association of income with health status and a negative association with mortality. This paper studies the effects of income on health and mortality, using only the part of income variation that is due to a truly exogenous factor: the monetary lottery prizes of individuals. The findings are that higher income causally generates good health and that this effect is of similar magnitude as when traditional estimation techniques are used. A 10 percent increase in income increases good health by about 0.01-0.02 standard deviations.

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Publisher Info
Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 442.

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Length: 51 pages
Date of creation: Feb 2002
Date of revision:
Handle: RePEc:iza:izadps:dp442

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Related research
Keywords: Health; mortality; income; lottery;

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Find related papers by JEL classification:
D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
I12 - Health, Education, and Welfare - - Health - - - Health Production

This paper has been announced in the following NEP Reports:

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Gerdtham, Ulf-G & Johannesson, Magnus, 1997. "New Estimates of the Demand for Health: Results Based on a Categorical Health Measure and Swedish Micro Data," Working Paper Series in Economics and Finance 205, Stockholm School of Economics. [Downloadable!]
  2. Janet Currie & Brigitte C. Madrian, 1998. "Health, Health Insurance and the Labor Market," JCPR Working Papers 27, Northwestern University/University of Chicago Joint Center for Poverty Research.
    Other versions:
  3. Deaton, A., 1998. "Aging and Inequality in Income and Health," Papers 181, Princeton, Woodrow Wilson School - Development Studies.
    Other versions:
  4. Anne Case, 2001. "Does Money Protect Health Status? Evidence from South African Pensions," NBER Working Papers 8495, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  5. Grossman, Michael, 1972. "On the Concept of Health Capital and the Demand for Health," Journal of Political Economy, University of Chicago Press, vol. 80(2), pages 223-55, March-Apr. [Downloadable!] (restricted)
  6. Angus Deaton & Christina Paxson, 1999. "Mortality, Education, Income, and Inequality among American Cohorts," NBER Working Papers 7140, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  7. Gerdtham, U. -G. & Johannesson, M. & Lundberg, L. & Isacson, D., 1999. "The demand for health: results from new measures of health capital," European Journal of Political Economy, Elsevier, vol. 15(3), pages 501-521, September. [Downloadable!] (restricted)
  8. Guido W. Imbens & Donald B. Rubin & Bruce I. Sacerdote, 2001. "Estimating the Effect of Unearned Income on Labor Earnings, Savings, and Consumption: Evidence from a Survey of Lottery Players," American Economic Review, American Economic Association, vol. 91(4), pages 778-794, September. [Downloadable!] (restricted)
  9. Esther Duflo, 2000. "Child Health and Household Resources in South Africa: Evidence from the Old Age Pension Program," American Economic Review, American Economic Association, vol. 90(2), pages 393-398, May. [Downloadable!] (restricted)
  10. Pritchett, Lant & Summers, Lawrence H., 1993. "Wealthier is healthier," Policy Research Working Paper Series 1150, The World Bank. [Downloadable!]
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Eriksson, Tor & Bratsberg, Bernt & Raaum, Oddbjørn, 2005. "Earnings persistence across generations: Transmission through health?," Memorandum 35/2005, Oslo University, Department of Economics. [Downloadable!]
  2. Lixin Cai, 2008. "Be Wealthy to Stay Healthy: An Analysis of Older Australians Using the HILDA Survey," Melbourne Institute Working Paper Series wp2008n08, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne. [Downloadable!]
  3. David W. Johnston & Carol Propper & Michael A. Shields, 2007. "Comparing Subjective and Objective Measures of Health: Evidence from Hypertension for the Income/Health Gradient," IZA Discussion Papers 2737, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  4. Paul Frijters & John P. Haisken-DeNew & Michael Shields, 2003. "Estimating The Causal Effect of Income on Health: Evidence from Post Reunification East Germany," CEPR Discussion Papers 465, Centre for Economic Policy Research, Research School of Social Sciences, Australian National University. [Downloadable!]
  5. Logan McLeod & Michael R. Veall, 2002. "The Dynamics of Food Deprivation and Overall Health: Evidence from the Canadian National Population Health Survey," Quantitative Studies in Economics and Population Research Reports 377, McMaster University. [Downloadable!]
    Other versions:
  6. Maarten Lindeboom & Ana Llena-Nozal & Bas van der Klaauw, 2006. "Disability and Work: The Role of Health Shocks and Childhood Circumstances," IZA Discussion Papers 2096, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  7. Logan McLeod & Michael Veall, 2006. "The dynamics of food insecurity and overall health: evidence from the Canadian National Population Health Survey," Applied Economics, Taylor and Francis Journals, vol. 38(18), pages 2131-2146, October. [Downloadable!] (restricted)
  8. William Nilsson, 2008. "Spousal Income and Sick Leave: What do Twins Tell us About Causality?," Journal of Family and Economic Issues, Springer, vol. 29(3), pages 407-426, September. [Downloadable!] (restricted)
  9. Mark L. Hoekstra & Scott Hankins & Paige Marta Skiba, 2008. "The Ticket to Easy Street? The Financial Consequences of Winning the Lottery," Working Papers 344, University of Pittsburgh, Department of Economics, revised Oct 2009. [Downloadable!]
  10. Martin Salm, 2008. "Job loss does not cause ill health," MEA discussion paper series 08163, Mannheim Research Institute for the Economics of Aging (MEA), University of Mannheim. [Downloadable!]
    Other versions:
  11. Maarten Lindeboom & France Portrait & Gerard J. van den Berg, 2002. "An econometric analysis of the mental-health effects of major events in the life of older individuals," Health Economics, John Wiley & Sons, Ltd., vol. 11(6), pages 505-520. [Downloadable!]
    Other versions:
  12. Daniel G. Sullivan & Till von Wachter, 2006. "Mortality, mass-layoffs, and career outcomes: an analysis using administrative data," Working Paper Series WP-06-21, Federal Reserve Bank of Chicago. [Downloadable!]
  13. Frijters, Paul & Haisken-DeNew, John & Shields, Michael A., 2005. "Socio-Economic Status, Health Shocks, Life Satisfaction and Mortality: Evidence from an Increasing Mixed Proportional Hazard Model," IZA Discussion Papers 1488, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  14. Nilsson, William, 2006. "Socioeconomic Status and Sickness Absence - What do twins tell us about causality?," UmeÃ¥ Economic Studies 670, Umeå University, Department of Economics. [Downloadable!]
  15. Andrew M. Jones, 2007. "Identification of treatment effects in Health Economics," Health Economics, John Wiley & Sons, Ltd., vol. 16(11), pages 1127-1131. [Downloadable!]
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