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Revisiting Health and Income Inequality Relationship:Evidence from Developing Countries

  • Pulok, Mohammad Habibullah
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    In general, countries with more equal income distribution generally enjoy better health. Earlier empirical studies on the relationship between income distribution and health at country level present strong evidence that income inequality on an average impedes the improvement of population health. However, a majority of these empirical studies are based on data from either only developed countries or pooled data from developing and developed countries. They mainly study the relationship at a single point of time or at an average of several years. These studies also fail to control for country specific unobserved heterogeneity. Departing from the general trend of current literature, this paper examines the health-income inequality hypothesis using panel data from 31 low income and low middle income countries for the period of 1982-2002. The results from the simple pooled OLS analysis indicate that health and income inequality is negatively related in these countries. This finding is in line with the most of the earlier cross country studies. However, application of fixed effects and random effects model to control country specific heterogeneity provides contradictory results. In other words, my findings from this study confirm that there is a positive relation between health and income distribution in this set of developing countries over this period.

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    Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 39766.

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    Date of creation: 15 Jun 2012
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    Handle: RePEc:pra:mprapa:39766
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    1. Meschi, Elena & Vivarelli, Marco, 2009. "Trade and Income Inequality in Developing Countries," World Development, Elsevier, vol. 37(2), pages 287-302, February.
    2. Hugh Gravelle & John Wildman & Matthew Sutton, . "Income, Income Inequality and Health: What can we Learn from Aggregate Data?," Discussion Papers 00/26, Department of Economics, University of York.
    3. Céline Gimet & Thomas Lagoarde-Segot, 2011. "A closer look at financial development and income distribution," Post-Print halshs-00564641, HAL.
    4. Babones, Salvatore J., 2008. "Income inequality and population health: Correlation and causality," Social Science & Medicine, Elsevier, vol. 66(7), pages 1614-1626, April.
    5. Andrew Leigh & Christopher Jencks, 2006. "Inequality and Mortality: Long-Run Evidence from a Panel of Countries," CEPR Discussion Papers 533, Centre for Economic Policy Research, Research School of Economics, Australian National University.
    6. Jeffrey M Wooldridge, 2010. "Econometric Analysis of Cross Section and Panel Data," MIT Press Books, The MIT Press, edition 2, volume 1, number 0262232588, June.
    7. Jennifer Mellor & Jeffrey Milyo, 1998. "Income Inequality and Health Status in the United States: Evidence From the Current Population Survey," Discussion Papers Series, Department of Economics, Tufts University 9815, Department of Economics, Tufts University.
    8. 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.
    9. Wilkinson, Richard G & Pickett, Kate E., 2006. "Income inequality and population health: A review and explanation of the evidence," Social Science & Medicine, Elsevier, vol. 62(7), pages 1768-1784, April.
    10. Dierk Herzer & Peter Nunnenkamp, 2011. "Income Inequality and Health: New Evidence from Panel Data," Kiel Working Papers 1736, Kiel Institute for the World Economy.
    11. Baltagi, Badi H. & Wu, Ping X., 1999. "Unequally Spaced Panel Data Regressions With Ar(1) Disturbances," Econometric Theory, Cambridge University Press, vol. 15(06), pages 814-823, December.
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