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Income, relative income, and self‐reported health in Britain 1979–2000

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  • Hugh Gravelle
  • Matt Sutton

Abstract

We test the relative income hypothesis that an individual's health depends on the distribution of income in a reference group, as well as on the income of the individual. We use data on 231 208 individuals in Great Britain from 19 rounds of the General Household Survey between 1979 and 2000. Results are insensitive to the measure of self‐assessed health used but the sign and significance of the effect of relative income depend on the reference group (national or regional) and the measure of relative income (Gini coefficient, absolute or proportional difference from the reference group mean, Yitzhaki absolute and proportional relative deprivation and affluence). Only one model (relative deprivation measured as income proportional to regional mean income) performs better than the model without relative income and has a positive estimated effect of absolute income on health. In this model the increase in the probability of good health from a ceteris paribus reduction in relative deprivation from the upper quartile to zero is 0.010, whereas an increase in income from the lower to the upper quartile increases the probability by 0.056. While our results provide only very weak support for the relative deprivation hypothesis, the inevitable correlation of measures of individual income and relative deprivation measured by comparing income and incomes in a reference group makes identification of the separate effects of income and relative deprivation problematic. Copyright © 2008 John Wiley & Sons, Ltd.

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  • 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, February.
  • Handle: RePEc:wly:hlthec:v:18:y:2009:i:2:p:125-145
    DOI: 10.1002/hec.1354
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    File URL: https://doi.org/10.1002/hec.1354
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    References listed on IDEAS

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    1. 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.
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    Cited by:

    1. Martin Huber & Michael Lechner & Conny Wunsch, 2011. "Does leaving welfare improve health? Evidence for Germany," Health Economics, John Wiley & Sons, Ltd., vol. 20(4), pages 484-504, April.
    2. Brady P. Horn & Johanna Catherine Maclean & Michael R. Strain, 2017. "Do Minimum Wage Increases Influence Worker Health?," Economic Inquiry, Western Economic Association International, vol. 55(4), pages 1986-2007, October.
    3. Roberta Distante, 2013. "Subjective Well-Being, Income and Relative Concerns in the UK," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 113(1), pages 81-105, August.
    4. Chee Hon Chan & Ho Kit Wong & Paul Siu Fai Yip, 2017. "Associations of relative income deprivation with perceived happiness and self-rated health among the Hong Kong Chinese population," International Journal of Public Health, Springer;Swiss School of Public Health (SSPH+), vol. 62(6), pages 697-707, July.
    5. Hilda Osafo Hounkpatin & Alex Wood & Gordon Brown & Graham Dunn, 2015. "Why does Income Relate to Depressive Symptoms? Testing the Income Rank Hypothesis Longitudinally," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 124(2), pages 637-655, November.
    6. 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.
    7. Sun, Ping & Unger, Jennifer B. & Palmer, Paula & Ma, Huiyan & Xie, Bin & Sussman, Steve & Johnson, C. Anderson, 2012. "Relative income inequality and selected health outcomes in urban Chinese youth," Social Science & Medicine, Elsevier, vol. 74(1), pages 84-91.
    8. Kåre 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.
    9. Akay, Alpaslan & Martinsson, Peter & Ralsmark, Hilda, 2019. "Relative concerns and sleep behavior," Economics & Human Biology, Elsevier, vol. 33(C), pages 1-14.
    10. Boone, Jan, 2020. "Pricing above Value: Selling to an Adverse Selection Market," Other publications TiSEM eda6a1de-4db6-49a6-87e4-3, Tilburg University, School of Economics and Management.
    11. 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.
    12. 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.
    13. 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.
    14. Edward Anderson & Maria Ana Jalles D'Orey & Maren Duvendack & Lucio Esposito, 2017. "Does Government Spending Affect Income Inequality? A Meta-Regression Analysis," Journal of Economic Surveys, Wiley Blackwell, vol. 31(4), pages 961-987, September.
    15. Boone, Jan, 2018. "Basic versus supplementary health insurance: Access to care and the role of cost effectiveness," Journal of Health Economics, Elsevier, vol. 60(C), pages 53-74.
    16. Elena Bárcena-Martín & Cortés Aguilar Alexandra & Ana I. Moro Egido, 2013. "The role of proximity and social comparisons on subjective well-being," ThE Papers 13/10, Department of Economic Theory and Economic History of the University of Granada..
    17. Boone, Jan, 2020. "Pricing above Value: Selling to an Adverse Selection Market," Discussion Paper 2020-023, Tilburg University, Center for Economic Research.
    18. Boone, Jan, 2020. "Pricing above Value: Selling to an Adverse Selection Market," Other publications TiSEM 700b2f3e-d1c8-4422-9b54-f, Tilburg University, School of Economics and Management.

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