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What is the relationship between income inequality and health? Evidence from the BHPS

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  • Paula K. Lorgelly

    (Section of Public Health and Health Policy, University of Glasgow, Glasgow, UK)

  • Joanne Lindley

    (Department of Economics, University of Sheffield, Sheffield, UK)

Abstract

Income inequality hypotheses propose that income differentials and|or income distributions have a detrimental effect on health. This previously well accepted relationship between inequality and health has recently come under scrutiny; some claim that it is a statistical artefact, arguing that aggregate level data are not sophisticated enough to adequately test for (and discriminate between) their existence. Supporters argue that it is a question of estimating the relationship using, amongst other things, an appropriate geographical scale. This paper adds to the debate by estimating the relationship between income inequality and health using individual panel data, exploring the relationship at the regional as well as the national level, while attempting to discriminate between the competing hypotheses. Pooled, random and fixed effects ordered probit models are exploited to estimate the relationship between self-reported health and household income, income inequality and relative income. While the estimating regressions find support for the absolute income hypothesis, there is no support for the income inequality hypothesis or relative income hypothesis, and as such we argue that there is limited evidence of an effect of income inequality on health within Britain. Copyright © 2007 John Wiley & Sons, Ltd.

Suggested Citation

  • Paula K. Lorgelly & Joanne Lindley, 2008. "What is the relationship between income inequality and health? Evidence from the BHPS," Health Economics, John Wiley & Sons, Ltd., vol. 17(2), pages 249-265.
  • Handle: RePEc:wly:hlthec:v:17:y:2008:i:2:p:249-265
    DOI: 10.1002/hec.1254
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    References listed on IDEAS

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    1. The Spirit Level is junk science part deux (updated)
      by Tino in Super-Economy on 2010-02-15 13:08:00

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    1. Grönqvist, Hans & Johansson, Per & Niknami, Susan, 2012. "Income inequality and health: Lessons from a refugee residential assignment program," Journal of Health Economics, Elsevier, vol. 31(4), pages 617-629.
    2. Hugh Gravelle & Matt Sutton, 2009. "Income, relative income, and self-reported health in Britain 1979-2000," Health Economics, John Wiley & Sons, Ltd., vol. 18(2), pages 125-145.
    3. KÃ¥re Bævre & Øystein Kravdal, 2014. "The effects of earlier income variation on mortality: An analysis of Norwegian register data," Population Studies, Taylor & Francis Journals, vol. 68(1), pages 81-94, March.
    4. Christopher J. Boyce & Andrew J. Oswald, 2012. "Do people become healthier after being promoted?," Health Economics, John Wiley & Sons, Ltd., vol. 21(5), pages 580-596, May.
    5. Rambotti, Simone, 2015. "Recalibrating the spirit level: An analysis of the interaction of income inequality and poverty and its effect on health," Social Science & Medicine, Elsevier, vol. 139(C), pages 123-131.
    6. Feng, Zhixin & Wang, Wenfei Winnie & Jones, Kelvyn & Li, Yaqing, 2012. "An exploratory multilevel analysis of income, income inequality and self-rated health of the elderly in China," Social Science & Medicine, Elsevier, vol. 75(12), pages 2481-2492.
    7. Loree, Jacob, 2015. "State Level Income Inequality and Individual Self-Reported Health Status: Evidence from the United States," MPRA Paper 72638, University Library of Munich, Germany.
    8. Petri Böckerman, 2013. "Top Income Shares and Mortality: Evidence from Advanced Countries," Journal of Income Distribution, Ad libros publications inc., vol. 22(1), pages 57-69, March.
    9. Chen, Zhuo & Gotway Crawford, Carol A., 2012. "The role of geographic scale in testing the income inequality hypothesis as an explanation of health disparities," Social Science & Medicine, Elsevier, vol. 75(6), pages 1022-1031.
    10. Gunasekara, Fiona Imlach & Carter, Kristie & Blakely, Tony, 2011. "Change in income and change in self-rated health: Systematic review of studies using repeated measures to control for confounding bias," Social Science & Medicine, Elsevier, vol. 72(2), pages 193-201, January.
    11. Alexander Silbersdorff & Julia Lynch & Stephan Klasen & Thomas Kneib, 2017. "Reconsidering the Income-Illness Relationship Using Distributional Regression: An Application to Germany," SOEPpapers on Multidisciplinary Panel Data Research 931, DIW Berlin, The German Socio-Economic Panel (SOEP).
    12. Vincent Hildebrand & Philippe Kerm, 2009. "Income inequality and self-rated health status: Evidence from the european community household panel," Demography, Springer;Population Association of America (PAA), vol. 46(4), pages 805-825, November.
    13. repec:spr:ijphth:v:62:y:2017:i:6:d:10.1007_s00038-017-0953-x is not listed on IDEAS
    14. Van Ourti, Tom & van Doorslaer, Eddy & Koolman, Xander, 2009. "The effect of income growth and inequality on health inequality: Theory and empirical evidence from the European Panel," Journal of Health Economics, Elsevier, vol. 28(3), pages 525-539, May.
    15. repec:aia:ginidp:dp17 is not listed on IDEAS
    16. Petrie, Dennis & Allanson, Paul & Gerdtham, Ulf-G., 2011. "Accounting for the dead in the longitudinal analysis of income-related health inequalities," Journal of Health Economics, Elsevier, vol. 30(5), pages 1113-1123.
    17. Karlsson, Martin & Nilsson, Therese & Lyttkens, Carl Hampus & Leeson, George, 2010. "Income inequality and health: Importance of a cross-country perspective," Social Science & Medicine, Elsevier, vol. 70(6), pages 875-885, March.
    18. Maite Blázquez & Elena Cottini & Ainhoa Herrarte, 2014. "The socioeconomic gradient in health: how important is material deprivation?," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 12(2), pages 239-264, June.
    19. Zheng, Hui, 2009. "Rising U.S. income inequality, gender and individual self-rated health, 1972-2004," Social Science & Medicine, Elsevier, vol. 69(9), pages 1333-1342, November.
    20. Owen O'Donnell & Eddy Van Doorslaer & Tom Van Ourti, 2013. "Health and Inequality," Tinbergen Institute Discussion Papers 13-170/V, Tinbergen Institute.
    21. Kuo, Chun-Tung & Chiang, Tung-liang, 2013. "The association between relative deprivation and self-rated health, depressive symptoms, and smoking behavior in Taiwan," Social Science & Medicine, Elsevier, vol. 89(C), pages 39-44.
    22. Adjaye-Gbewonyo, Kafui & Kawachi, Ichiro, 2012. "Use of the Yitzhaki Index as a test of relative deprivation for health outcomes: A review of recent literature," Social Science & Medicine, Elsevier, vol. 75(1), pages 129-137.
    23. Giacomo Corneo, 2011. "GINI DP 17: Income Inequality, Value Systems and Macroeconomic Performance," GINI Discussion Papers 17, AIAS, Amsterdam Institute for Advanced Labour Studies.
    24. Franz Buscha, 2016. "Does Daily Sunshine Make You Happy? Subjective Measures of Well-Being and the Weather," Manchester School, University of Manchester, vol. 84(5), pages 642-663, September.
    25. Hounkpatin, Hilda Osafo & Wood, Alex M. & Dunn, Graham, 2016. "Does income relate to health due to psychosocial or material factors? Consistent support for the psychosocial hypothesis requires operationalization with income rank not the Yitzhaki Index," Social Science & Medicine, Elsevier, vol. 150(C), pages 76-84.

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