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Health, Income and Inequality: Evidence from a Survey of Older Italians

  • Gabriella Berloffa


    (University of Trento)

  • Agar Brugiavini


    (University "Ca' Foscari" of Venice)

  • Dino Rizzi


    (University "Ca' Foscari" of Venice)

This paper uses the Survey of Health, Ageing and Wealth (SHAW) to study the relationship between health status and economic welfare at individual level. We develop a model to estimate the welfare cost of ill-health: the terminology and the intuition go along the lines of the equivalence scale literature. While in that case the focus is on the welfare cost brought about by the presence of children, we measure the welfare cost of poor health. The crucial variables in this approach are, besides income and health status, the economic decisions of the household which can be directly related to health conditions, such as health-related expenses. By estimating a demand system we derive equivalence scales based also on health expenditures to learn about the cost of health conditions on economic welfare, controlling for other covariates. We show that households characterised by poor health are effectively “poorer” in an economic sense.

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Article provided by GDE (Giornale degli Economisti e Annali di Economia), Bocconi University in its journal Giornale degli Economisti e Annali di Economia.

Volume (Year): 62 (2003)
Issue (Month): 1 (April)
Pages: 35-55

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Handle: RePEc:gde:journl:gde_v62_n1_p35-55
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  1. Deaton,Angus & Muellbauer,John, 1980. "Economics and Consumer Behavior," Cambridge Books, Cambridge University Press, number 9780521296762.
  2. Angus Deaton, 2001. "Relative Deprivation, Inequality, and Mortality," NBER Working Papers 8099, National Bureau of Economic Research, Inc.
  3. Anne Case & Darren Lubotsky & Christina Paxson, 2002. "Economic status and health in childhood: the origins of the gradient," Working Papers 262, Princeton University, Woodrow Wilson School of Public and International Affairs, Center for Health and Wellbeing..
  4. Deaton, Angus S & Muellbauer, John, 1980. "An Almost Ideal Demand System," American Economic Review, American Economic Association, vol. 70(3), pages 312-26, June.
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