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Mental health, subjective well-being, and household health investment

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Listed:
  • Wang, Xinjian
  • Jiao, Xuyang
  • Zhang, Jiang
  • Huang, Ling

Abstract

Understanding how psychological factors influence health behaviors remains a critical gap in health economics research, particularly in rapidly developing economies like China. While studies have examined economic determinants of health investment, the role of mental well-being in shaping health expenditure decisions remains underexplored, especially across different income groups. Using the China Family Panel Studies 2020 dataset (n=8,843), we employ regression analyses with instrumental variables and heterogeneity tests to investigate how mental health affects household health investment patterns. Our findings reveal that better mental health significantly increases health-related expenditures, with stronger effects among lower-income households. Subjective well-being partially mediates this relationship, while socioeconomic factors, particularly education and household registration status, show varying impacts across income levels. These results suggest that psychological well-being plays a crucial role in health investment decisions, especially for resource-constrained households, highlighting the need for income-sensitive health promotion strategies in developing economies.

Suggested Citation

  • Wang, Xinjian & Jiao, Xuyang & Zhang, Jiang & Huang, Ling, 2025. "Mental health, subjective well-being, and household health investment," Finance Research Letters, Elsevier, vol. 72(C).
    • Handle: RePEc:eee:finlet:v:72:y:2025:i:c:s1544612324015083
    DOI: 10.1016/j.frl.2024.106479
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    References listed on IDEAS

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    1. Zhang, Anwen & Nikoloski, Zlatko & Mossialos, Elias, 2017. "Does health insurance reduce out-of-pocket expenditure? Heterogeneity among China's middle-aged and elderly," Social Science & Medicine, Elsevier, vol. 190(C), pages 11-19.
    2. Liu, Hong & Zhao, Zhong, 2014. "Does health insurance matter? Evidence from China’s urban resident basic medical insurance," Journal of Comparative Economics, Elsevier, vol. 42(4), pages 1007-1020.
    3. Ohrnberger, Julius & Fichera, Eleonora & Sutton, Matt, 2017. "The relationship between physical and mental health: A mediation analysis," Social Science & Medicine, Elsevier, vol. 195(C), pages 42-49.
    4. repec:plo:pmed00:1002975 is not listed on IDEAS
    5. L. Ring & S. Höfer & H. McGee & A. Hickey & C. O’Boyle, 2007. "Individual quality of life: can it be accounted for by psychological or subjective well-being?," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 82(3), pages 443-461, July.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Mental health; Health investment; Subjective well-being; Income heterogeneity; Chinese households;
    All these keywords.

    JEL classification:

    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health

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