Exploring the health-wealth nexus
The casual links between health and economic resources have long concerned social scientists. We use four waves of data from the Panel Study of Income Dynamics to analyze the impact of wealth upon an individual's health status. The difficulty in approaching this task that has bedeviled previous studies is that wealth may be endogenous; a priori, it is just as likely that changes in health affect wealth as vice versa. We argue that inheritance is a suitable instrument for the change in wealth, and implement a straightforward instrumental variables strategy to deal with this problem. Our results suggest that the causal relationship running from wealth to health may not be as strong as first appears. In the data, wealth exerts a positive and statistically significant effect on health status, but it is very small in magnitude. Instrumental variables estimation leaves the point estimate approximately the same, but renders it insignificantly different from zero. And even when the point estimate is increased by twice its standard error, the quantitative effect is small. We conclude that the wealth-health connection is not driven by short run changes in wealth.
(This abstract was borrowed from another version of this item.)
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
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.:
- Michael Hurd & Daniel McFadden & Angela Merrill & Tiago Ribeiro, 2000. "Healthy, Wealthy, and Wise? Socioeconomic Status and Morbidity/Mortality," Econometric Society World Congress 2000 Contributed Papers 1887, Econometric Society.
- Mark B. McClellan, 1998. "Health Events, Health Insurance, and Labor Supply: Evidence from the Health and Retirement Survey," NBER Chapters, in: Frontiers in the Economics of Aging, pages 301-350 National Bureau of Economic Research, Inc.
- Douglas Holtz-Eakin & David Joulfaian & Harvey S. Rosen, 1992. "The Carnegie Conjecture: Some Empirical Evidence," NBER Working Papers 4118, National Bureau of Economic Research, Inc.
- Rivers, Douglas & Vuong, Quang H., 1988. "Limited information estimators and exogeneity tests for simultaneous probit models," Journal of Econometrics, Elsevier, vol. 39(3), pages 347-366, November.
- Orazio P. Attanasio & Hilary W. Hoynes, 1995.
"Differential Mortality and Wealth Accumulation,"
NBER Working Papers
5126, National Bureau of Economic Research, Inc.
- O. Attanasio & H. W. Hoynes, . "Differential mortality and wealth accumulation," Institute for Research on Poverty Discussion Papers 1079-96, University of Wisconsin Institute for Research on Poverty.
- Douglas Staiger & James H. Stock, 1997.
"Instrumental Variables Regression with Weak Instruments,"
Econometric Society, vol. 65(3), pages 557-586, May.
- Douglas Staiger & James H. Stock, 1994. "Instrumental Variables Regression with Weak Instruments," NBER Technical Working Papers 0151, National Bureau of Economic Research, Inc.
- Smith, James P, 1998. "Socioeconomic Status and Health," American Economic Review, American Economic Association, vol. 88(2), pages 192-96, May.
- Douglas Holtz-Eakin & David Joulfaian & Harvey S. Rosen, 1993. "The Carnegie Conjecture: Some Empirical Evidence," The Quarterly Journal of Economics, Oxford University Press, vol. 108(2), pages 413-435.
- repec:pri:cheawb:deaton_paxson_mortality_ukus.pdf is not listed on IDEAS
- Stephen Wu, 2003. "The Effects of Health Events on the Economic Status of Married Couples," Journal of Human Resources, University of Wisconsin Press, vol. 38(1).
- Angus Deaton & Christina Paxson, 2001.
"Mortality, Income, and Income Inequality Over Time in Britain and the United States,"
NBER Working Papers
8534, National Bureau of Economic Research, Inc.
- Angus S. Deaton & Christina Paxson, 2004. "Mortality, Income, and Income Inequality over Time in Britain and the United States," NBER Chapters, in: Perspectives on the Economics of Aging, pages 247-286 National Bureau of Economic Research, Inc.
- Angus Deaton & Christina Paxson, 2001. "Mortality, Income, and Income Inequality Over time in Britain and the United States," Working Papers 267, Princeton University, Woodrow Wilson School of Public and International Affairs, Center for Health and Wellbeing..
- James P. Smith, 1999. "Healthy Bodies and Thick Wallets: The Dual Relation between Health and Economic Status," Journal of Economic Perspectives, American Economic Association, vol. 13(2), pages 145-166, Spring.
- Orazio P. Attanasio & Carl Emmerson, 2001.
"Differential Mortality in the UK,"
NBER Working Papers
8241, National Bureau of Economic Research, Inc.
- John Cawley, 2000. "Body Weight and Women's Labor Market Outcomes," NBER Working Papers 7841, National Bureau of Economic Research, Inc.
- Robert B. Barsky & Miles S. Kimball & F. Thomas Juster & Matthew D. Shapiro, 1995. "Preference Parameters and Behavioral Heterogeneity: An Experimental Approach in the Health and Retirement Survey," NBER Working Papers 5213, National Bureau of Economic Research, Inc.
- Amemiya, Takeshi, 1978. "The Estimation of a Simultaneous Equation Generalized Probit Model," Econometrica, Econometric Society, vol. 46(5), pages 1193-1205, September.
- Robert B. Barsky & F. Thomas Juster & Miles S. Kimball & Matthew D. Shapiro, 1997. "Preference Parameters and Behavioral Heterogeneity: An Experimental Approach in the Health and Retirement Study," The Quarterly Journal of Economics, Oxford University Press, vol. 112(2), pages 537-579.
- Ellen Meara, 2001. "Why is Health Related to Socioeconomic Status?," NBER Working Papers 8231, National Bureau of Economic Research, Inc.
- Ettner, Susan L., 1996. "New evidence on the relationship between income and health," Journal of Health Economics, Elsevier, vol. 15(1), pages 67-85, February.
- White, Halbert, 1980. "A Heteroskedasticity-Consistent Covariance Matrix Estimator and a Direct Test for Heteroskedasticity," Econometrica, Econometric Society, vol. 48(4), pages 817-38, May.
- John Bound & David A. Jaeger & Regina Baker, 1993. "The Cure Can Be Worse than the Disease: A Cautionary Tale Regarding Instrumental Variables," NBER Technical Working Papers 0137, National Bureau of Economic Research, Inc.
When requesting a correction, please mention this item's handle: RePEc:eee:jhecon:v:22:y:2003:i:5:p:713-730. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei)
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 references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link 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 profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.