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The link between health and economic preferences: Evidence from 22 OECD countries

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  • Xi Cen
  • David W. Johnston
  • Claryn S. J. Kung
  • Michael A. Shields
  • Eric C. Sun

Abstract

We study the link between health status and economic preferences using survey data from 22 Organisation for Economic Co‐operation and Development (OECD) countries. We hypothesize that there is a relationship between poor health and the preferences that people hold, and therefore their choices and decisions. We find that individuals with a limiting health condition are more risk averse and less patient, and that this is true for physical and mental health conditions. The magnitudes of the health gap are approximately 60% and 70% of the gender gap in risk and time preferences, respectively. Importantly, the health gaps are large for males, females, young, old, school dropouts, degree holders, employed, nonemployed, rich, and poor. They also hold for countries with different levels of gross domestic product (GDP), inequality, social expenditure, and disease burden.

Suggested Citation

  • Xi Cen & David W. Johnston & Claryn S. J. Kung & Michael A. Shields & Eric C. Sun, 2021. "The link between health and economic preferences: Evidence from 22 OECD countries," Health Economics, John Wiley & Sons, Ltd., vol. 30(4), pages 915-920, April.
  • Handle: RePEc:wly:hlthec:v:30:y:2021:i:4:p:915-920
    DOI: 10.1002/hec.4225
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    References listed on IDEAS

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    1. Chris Sampson’s journal round-up for 29th March 2021
      by Chris Sampson in The Academic Health Economists' Blog on 2021-03-29 11:00:13

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    1. Norrgren, Lisa, 2022. "Time preference, illness, and death," Journal of Health Economics, Elsevier, vol. 86(C).

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