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

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  • Alassane Drabo

    (CERDI - Centre d'Études et de Recherches sur le Développement International - UdA - Université d'Auvergne - Clermont-Ferrand I - CNRS - Centre National de la Recherche Scientifique)

Abstract

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.

Suggested Citation

  • Alassane Drabo, 2011. "Impact of Income Inequality on Health: Does Environment Quality Matter?," Working Papers halshs-00552993, HAL.
  • Handle: RePEc:hal:wpaper:halshs-00552993 Note: View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-00552993
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    References listed on IDEAS

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    1. 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.
    2. Angus Deaton, 2003. "Health, Inequality, and Economic Development," Journal of Economic Literature, American Economic Association, pages 113-158.
    3. Boyce, James K., 1994. "Inequality as a cause of environmental degradation," Ecological Economics, Elsevier, vol. 11(3), pages 169-178, December.
    4. 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.
    5. 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.
    6. 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.
    7. 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.
    8. James Boyce, 1994. "Inequality as a Cause of Environmental Degradation," Published Studies ps1, Political Economy Research Institute, University of Massachusetts at Amherst.
    9. Marsiliani, L. & Renstrom, T.I., 2000. "Inequality, Environmental Protection and Growth," Discussion Paper 2000-34, Tilburg University, Center for Economic Research.
    10. 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.
    11. 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.
    12. Babones, Salvatore J., 2008. "Income inequality and population health: Correlation and causality," Social Science & Medicine, Elsevier, vol. 66(7), pages 1614-1626, April.
    13. 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.
    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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    Cited by:

    1. Elnaz Hajebi & Mohammad Javad Razmi, 2014. "Effect Of Income Inequality On Health Status In A Selection Of Middle And Low Income Countries," Equilibrium. Quarterly Journal of Economics and Economic Policy, Institute of Economic Research, vol. 9(4), pages 133-152, December.
    2. repec:eee:rensus:v:74:y:2017:i:c:p:1336-1345 is not listed on IDEAS
    3. Alassane Drabo, 2011. "Agricultural primary commodity export and environmental degradation: what consequences for population's health?," Working Papers halshs-00586034, HAL.
    4. repec:eee:ecolec:v:142:y:2017:i:c:p:249-256 is not listed on IDEAS

    More about this item

    Keywords

    health status; income inequality; Environmental quality; instrumental variables method;

    JEL classification:

    • Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics
    • I1 - Health, Education, and Welfare - - Health
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • C13 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Estimation: General

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