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Happiness And Medical Expenditures: Causal Evidence From Japanese Community Cohort - The Nagahama Study

Author

Listed:
  • Yusuke Inoue

    (The Research Center for Advanced Policy Studies (CAPS), Institute of Economic Research, Kyoto University)

  • Yasuharu Tabara

    (Graduate School of Public Health, Shizuoka Graduate University of Public Health)

  • Fumihiko Matsuda

    (Center for Genomic Medicine, Kyoto University Graduate School of Medicine)

Abstract

In Japan's era of population decline and fiscal strain, exploring alternative policy levers beyond conventional health-system reforms has become imperative. We examine whether higher subjective happiness keeps individual medical expenditures down, using the Nagahama Study, a community-based study conducted by the city of Nagahama in partnership with Kyoto University, which links municipal health checks with socioeconomic surveys in 2019 and 2020. An instrumental-variable two-part model, treating happiness as endogenous with perceived "mattering" and "trust" as instruments, shows that a one-point increase in subjective happiness lowers average monthly medical spending by about ¥248 in 2019 (non-IV: ¥102) and ¥326 in 2020 (non-IV: ¥157). This average effect can be decomposed into two components: the probability of any medical use (extensive margin) and out-of-pocket spending among individuals with positive spending (intensive margin). The extensive margin shows weak effects, while the intensive margin consistently drives the overall decline in both years. These findings imply that strengthening psychosocial well-being could complement conventional reforms as a feasible lever for cost containment in ageing societies.

Suggested Citation

  • Yusuke Inoue & Yasuharu Tabara & Fumihiko Matsuda, 2026. "Happiness And Medical Expenditures: Causal Evidence From Japanese Community Cohort - The Nagahama Study," KIER Working Papers 1121, Kyoto University, Institute of Economic Research.
    • Handle: RePEc:kyo:wpaper:1121
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    References listed on IDEAS

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    JEL classification:

    • C36 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Instrumental Variables (IV) Estimation
    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being

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