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Impact of Income Inequality on Health: Does Environment Quality Matter?

Listed author(s):
  • Alassane Drabo

    (CERDI - Centre d'études et de recherches sur le developpement international - CNRS - Université d'Auvergne - Clermont-Ferrand I)

This paper examines the link between health indicators, environmental variables and income inequalities. Theoretically, all the mechanisms developed in the literature underline a negative impact of income inequality on health status. However, empirical studies find different results and the conclusions are far from a consensus. In this paper we investigate how environment degradation could be considered as a channel through which income distribution affects population health. We first develop a simple theoretical model based on Magnani (2000), in which relative income affects health status through the level of pollution abatement expenditures. Our econometric analysis shows that income inequalities negatively affect environmental quality and environment degradation worsens population's health. This negative effect of income inequalities on environment is mitigated by good institutions. We also show that income inequalities negatively affect health status. Another interesting result is that when environmental variables are taken into account, the level and the statistical significance of the coefficient of income inequality variable vanish. This confirms that environment quality is an important channel through which income inequalities affect population health. These results hold for air pollution indicators (CO2 and SO2) and water pollution indicator (BOD). It is also robust for rich and developing countries. Countries with high income inequalities may implement distributive policies in order to avoid its negative impact on health.

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Paper provided by HAL in its series Working Papers with number halshs-00552993.

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Date of creation: 06 Jan 2011
Handle: RePEc:hal:wpaper:halshs-00552993
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  1. Angus Deaton, 2003. "Health, Inequality, and Economic Development," Journal of Economic Literature, American Economic Association, vol. 41(1), pages 113-158, March.
  2. Bobak, Martin & Pikhart, Hynek & Rose, Richard & Hertzman, Clyde & Marmot, Michael, 2000. "Socioeconomic factors, material inequalities, and perceived control in self-rated health: cross-sectional data from seven post-communist countries," Social Science & Medicine, Elsevier, vol. 51(9), pages 1343-1350, November.
  3. John Lynch & George Smith & Marianne Hillemeier & Trivellore Raghunathan & George Kaplan & Mary Shaw, 2001. "Income Inequality, the Psycho-social Environment and Health Comparisons of Wealthy Nations," LIS Working papers 269, LIS Cross-National Data Center in Luxembourg.
  4. Matthieu CLEMENT (GREThA-GRES) & André MEUNIE (GREThA-GRES), 2008. "Economic Growth, inequality and environment quality: An empirical analysis applied to developing and transition countries," Cahiers du GRES (2002-2009) 2008-10, Groupement de Recherches Economiques et Sociales.
  5. Babones, Salvatore J., 2008. "Income inequality and population health: Correlation and causality," Social Science & Medicine, Elsevier, vol. 66(7), pages 1614-1626, April.
  6. Fred Pampel & Vijayan Pillai, 1986. "Patterns and determinants of infant mortality in developed nations, 1950–1975," Demography, Springer;Population Association of America (PAA), vol. 23(4), pages 525-542, November.
  7. Jennifer M. Mellor & Jeffrey D. Milyo, 2001. "Income inequality and health," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 20(1), pages 151-155.
  8. Boyce, James K., 1994. "Inequality as a cause of environmental degradation," Ecological Economics, Elsevier, vol. 11(3), pages 169-178, December.
  9. Sudhir Anand & Martin Ravallion, 1993. "Human Development in Poor Countries: On the Role of Private Incomes and Public Services," Journal of Economic Perspectives, American Economic Association, vol. 7(1), pages 133-150, Winter.
  10. Mayer, Susan E. & Sarin, Ankur, 2005. "Some mechanisms linking economic inequality and infant mortality," Social Science & Medicine, Elsevier, vol. 60(3), pages 439-455, February.
  11. Matthieu Clément & André Meunié, 2008. "Economic growth, inequality and environment quality: an empirical analysis applied to developing and transition countries," Post-Print hal-00652425, HAL.
  12. James Boyce, 1994. "Inequality as a Cause of Environmental Degradation," Published Studies ps1, Political Economy Research Institute, University of Massachusetts at Amherst.
  13. Marsiliani, L. & Renstrom, T.I., 2000. "Inequality, Environmental Protection and Growth," Discussion Paper 2000-34, Tilburg University, Center for Economic Research.
  14. Magnani, Elisabetta, 2000. "The Environmental Kuznets Curve, environmental protection policy and income distribution," Ecological Economics, Elsevier, vol. 32(3), pages 431-443, March.
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