IDEAS home Printed from https://ideas.repec.org/a/eee/ecanpo/v79y2023icp257-276.html
   My bibliography  Save this article

The effect of income shocks on health behaviors: Evidence from a low-income country

Author

Listed:
  • Nguyen, Cuong Viet
  • Nguyen, Minh Khanh Hoang
  • Phung, Tung Duc
  • Tran, Oanh Ngoc

Abstract

This study examines the income effect on health spending and health behaviors in Vietnam. We measure income shock by lottery prizes, controlling for spending on the lottery. Lottery prizes have no significant effect on the healthcare utilization of individuals. However, we find that lottery winnings result in a significant increase in spending on healthcare. A 1% increase in lottery winnings results in a 0.08% increase in expenditure on medicine and a 0.09% increase in the total amount individuals spend on healthcare. The effect on expenditure on healthcare tends to be larger for older people. A concern with increased income is the unexpected effect on risky health behaviors, such as smoking and drinking. In this study, we do not find that lottery prizes lead to greater spending on tobacco and alcohol.

Suggested Citation

  • Nguyen, Cuong Viet & Nguyen, Minh Khanh Hoang & Phung, Tung Duc & Tran, Oanh Ngoc, 2023. "The effect of income shocks on health behaviors: Evidence from a low-income country," Economic Analysis and Policy, Elsevier, vol. 79(C), pages 257-276.
    • Handle: RePEc:eee:ecanpo:v:79:y:2023:i:c:p:257-276
    DOI: 10.1016/j.eap.2023.06.014
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0313592623001261
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.eap.2023.06.014?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Hannes Schwandt, 2018. "Wealth Shocks and Health Outcomes: Evidence from Stock Market Fluctuations," American Economic Journal: Applied Economics, American Economic Association, vol. 10(4), pages 349-377, October.
    2. Terence C. Cheng & Joan Costa-Font & Nattavudh Powdthavee, 2018. "Do You Have to Win It to Fix It? A Longitudinal Study of Lottery Winners and Their Health-Care Demand," American Journal of Health Economics, MIT Press, vol. 4(1), pages 26-50, Winter.
    3. Kim, Seonghoon & Koh, Kanghyock, 2021. "The effects of income on health: Evidence from lottery wins in Singapore," Journal of Health Economics, Elsevier, vol. 76(C).
    4. Duflo, Esther & Glennerster, Rachel & Kremer, Michael, 2008. "Using Randomization in Development Economics Research: A Toolkit," Handbook of Development Economics, in: T. Paul Schultz & John A. Strauss (ed.), Handbook of Development Economics, edition 1, volume 4, chapter 61, pages 3895-3962, Elsevier.
    5. Daysal, N. Meltem & Lovenheim, Michael & Siersbæk, Nikolaj & Wasser, David N., 2021. "Home prices, fertility, and early-life health outcomes," Journal of Public Economics, Elsevier, vol. 198(C).
    6. Gardner, Jonathan & Oswald, Andrew J., 2007. "Money and mental wellbeing: A longitudinal study of medium-sized lottery wins," Journal of Health Economics, Elsevier, vol. 26(1), pages 49-60, January.
    7. Erik Lindqvist & Robert Östling & David Cesarini, 2020. "Long-Run Effects of Lottery Wealth on Psychological Well-Being," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 87(6), pages 2703-2726.
    8. Benedicte Apouey & Andrew E. Clark, 2015. "Winning Big but Feeling no Better? The Effect of Lottery Prizes on Physical and Mental Health," Health Economics, John Wiley & Sons, Ltd., vol. 24(5), pages 516-538, May.
    9. Pence Karen M., 2006. "The Role of Wealth Transformations: An Application to Estimating the Effect of Tax Incentives on Saving," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 5(1), pages 1-26, July.
    10. Zhuan Pei & Jörn-Steffen Pischke & Hannes Schwandt, 2019. "Poorly Measured Confounders are More Useful on the Left than on the Right," Journal of Business & Economic Statistics, Taylor & Francis Journals, vol. 37(2), pages 205-216, April.
    11. Sarah Baird & Jacobus de Hoop & Berk Özler, 2013. "Income Shocks and Adolescent Mental Health," Journal of Human Resources, University of Wisconsin Press, vol. 48(2), pages 370-403.
    12. David Cesarini & Erik Lindqvist & Robert Östling & Björn Wallace, 2016. "Wealth, Health, and Child Development: Evidence from Administrative Data on Swedish Lottery Players," The Quarterly Journal of Economics, Oxford University Press, vol. 131(2), pages 687-738.
    13. Naila Kabeer & Hugh Waddington, 2015. "Economic impacts of conditional cash transfer programmes: a systematic review and meta-analysis," Journal of Development Effectiveness, Taylor & Francis Journals, vol. 7(3), pages 290-303, September.
    14. Christina Paxson & Norbert Schady, 2010. "Does Money Matter? The Effects of Cash Transfers on Child Development in Rural Ecuador," Economic Development and Cultural Change, University of Chicago Press, vol. 59(1), pages 187-229, October.
    15. Sudhanshu Handa & Silvio Daidone & Amber Peterman & Benjamin Davis & Audrey Pereira & Tia Palermo & Jennifer Yablonski, 2018. "Myth-Busting? Confronting Six Common Perceptions about Unconditional Cash Transfers as a Poverty Reduction Strategy in Africa," The World Bank Research Observer, World Bank, vol. 33(2), pages 259-298.
    16. Okeke, Edward N. & Abubakar, Isa S., 2020. "Healthcare at the beginning of life and child survival: Evidence from a cash transfer experiment in Nigeria," Journal of Development Economics, Elsevier, vol. 143(C).
    17. Eleonora Fichera & John Gathergood, 2016. "Do Wealth Shocks Affect Health? New Evidence from the Housing Boom," Health Economics, John Wiley & Sons, Ltd., vol. 25(S2), pages 57-69, November.
    18. Cuong Viet Nguyen, 2021. "Old-Age Pensions in a Lower Middle-Income Country: Economic or Psychological Effects?," Economic Development and Cultural Change, University of Chicago Press, vol. 69(3), pages 1165-1202.
    19. repec:wly:hlthec:v:25:y:2016:i::p:57-69 is not listed on IDEAS
    20. Cuong Viet Nguyen & Thu Thi Le & Nguyen Hanh Nguyen, 2021. "The impact of cigarette prices on smoking participation and tobacco expenditure in Vietnam," PLOS ONE, Public Library of Science, vol. 16(12), pages 1-20, December.
    21. Mikael Lindahl, 2005. "Estimating the Effect of Income on Health and Mortality Using Lottery Prizes as an Exogenous Source of Variation in Income," Journal of Human Resources, University of Wisconsin Press, vol. 40(1).
    22. White, Justin S. & Basu, Sanjay, 2016. "Does the benefits schedule of cash assistance programs affect the purchase of temptation goods? Evidence from Peru," Journal of Health Economics, Elsevier, vol. 46(C), pages 70-89.
    23. Barham, Tania, 2011. "A healthier start: The effect of conditional cash transfers on neonatal and infant mortality in rural Mexico," Journal of Development Economics, Elsevier, vol. 94(1), pages 74-85, January.
    24. Laura B. Rawlings, 2005. "Evaluating the Impact of Conditional Cash Transfer Programs," The World Bank Research Observer, World Bank, vol. 20(1), pages 29-55.
    25. Christian Raschke, 2019. "Unexpected windfalls, education, and mental health: evidence from lottery winners in Germany," Applied Economics, Taylor & Francis Journals, vol. 51(2), pages 207-218, January.
    26. Giang, Long Thanh & Nguyen, Cuong Viet, 2017. "How would cash transfers improve child welfare in Viet Nam?," Children and Youth Services Review, Elsevier, vol. 82(C), pages 87-98.
    27. David Card & Stefano DellaVigna, 2020. "What Do Editors Maximize? Evidence from Four Economics Journals," The Review of Economics and Statistics, MIT Press, vol. 102(1), pages 195-217, March.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Shi, Xuezhu, 2022. "The health-wealth nexus for the elderly: Evidence from the booming housing market in China," Labour Economics, Elsevier, vol. 78(C).
    2. Kim, Seonghoon & Koh, Kanghyock, 2021. "The effects of income on health: Evidence from lottery wins in Singapore," Journal of Health Economics, Elsevier, vol. 76(C).
    3. Andersen, Asbjørn G. & Kotsadam, Andreas & Somville, Vincent, 2022. "Material resources and well-being — Evidence from an Ethiopian housing lottery," Journal of Health Economics, Elsevier, vol. 83(C).
    4. Hannes Schwandt, 2018. "Wealth Shocks and Health Outcomes: Evidence from Stock Market Fluctuations," American Economic Journal: Applied Economics, American Economic Association, vol. 10(4), pages 349-377, October.
    5. Cuong Viet Nguyen & Finn Tarp, 2023. "Cash Transfers and Labor Supply: New Evidence on Impacts and Mechanisms," DERG working paper series 23-18, University of Copenhagen. Department of Economics. Development Economics Research Group (DERG).
    6. Rui Zhang & Chenglei Zhang & Jiahui Xia & Dawei Feng & Shaoyong Wu, 2022. "Household Wealth and Individuals’ Mental Health: Evidence from the 2012–2018 China Family Panel Survey," IJERPH, MDPI, vol. 19(18), pages 1-18, September.
    7. Martins, Igor & Cilliers, Jeanne & Fourie, Johan, 2019. "Legacies of Loss: The intergenerational outcomes of slaveholder compensation in the British Cape Colony," Lund Papers in Economic History 197, Lund University, Department of Economic History.
    8. Joan Costa-Font & Mario Györi, 2023. "Income windfalls and overweight: evidence from lottery wins," Empirical Economics, Springer, vol. 64(5), pages 2005-2026, May.
    9. Oscar Erixson, 2017. "Health responses to a wealth shock: evidence from a Swedish tax reform," Journal of Population Economics, Springer;European Society for Population Economics, vol. 30(4), pages 1281-1336, October.
    10. Julien Albertini & Anthony Terriau, 2019. "Wealth and health in South Africa," Working Papers halshs-02073800, HAL.
    11. Hsuan-Hua Huang & Hsing-Wen Han & Kuang-Ta Lo & Tzu-Ting Yang, 2023. "Liquidity Constraints, Cash Windfalls, and Entrepreneurship: Evidence from Administrative Data on Lottery Winners," Papers 2303.17029, arXiv.org.
    12. Costa-Font, Joan & Gyori, Mario, 2020. "Can Unearned Income Make Us Fitter? Evidence from Lottery Wins," IZA Discussion Papers 13903, Institute of Labor Economics (IZA).
    13. Martins, Igor & Cilliers, Jeanne & Fourie, Johan, 2023. "Legacies of loss: The health outcomes of slaveholder compensation in the British Cape Colony," Explorations in Economic History, Elsevier, vol. 89(C).
    14. Ariadna Jou & Nuria Mas & Carles Vergara-Alert, 2023. "Housing Wealth, Health and Deaths of Despair," The Journal of Real Estate Finance and Economics, Springer, vol. 66(3), pages 569-602, April.
    15. Yung-Yu Tsai & Hsing-Wen Han & Kuang-Ta Lo & Tzu-Ting Yang, 2022. "The Effect of Financial Resources on Fertility: Evidence from Administrative Data on Lottery Winners," Papers 2212.06223, arXiv.org, revised Dec 2023.
    16. Matthew W. Ridley & Gautam Rao & Frank Schilbach & Vikram H. Patel, 2020. "Poverty, Depression, and Anxiety: Causal Evidence and Mechanisms," NBER Working Papers 27157, National Bureau of Economic Research, Inc.
    17. Chen, Xi & Wang, Tianyu & Busch, Susan H., 2019. "Does money relieve depression? Evidence from social pension expansions in China," Social Science & Medicine, Elsevier, vol. 220(C), pages 411-420.
    18. Nguyen, Cuong Viet, 2021. "Can money buy friends? Evidence from a natural experiment," European Economic Review, Elsevier, vol. 136(C).
    19. Declan French, 2023. "From financial wealth shocks to ill‐health: Allostatic load and overload," Health Economics, John Wiley & Sons, Ltd., vol. 32(4), pages 939-952, April.
    20. Owen O'Donnell & Eddy Van Doorslaer & Tom Van Ourti, 2013. "Health and Inequality," Tinbergen Institute Discussion Papers 13-170/V, Tinbergen Institute.

    More about this item

    Keywords

    Health; Healthcare; Lottery prizes; Income shocks; Vietnam;
    All these keywords.

    JEL classification:

    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • I15 - Health, Education, and Welfare - - Health - - - Health and Economic Development
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:ecanpo:v:79:y:2023:i:c:p:257-276. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.journals.elsevier.com/economic-analysis-and-policy .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.