IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/72638.html
   My bibliography  Save this paper

State Level Income Inequality and Individual Self-Reported Health Status: Evidence from the United States

Author

Listed:
  • Loree, Jacob

Abstract

The relative income hypothesis theorizes an individual’s income, relative to the income of their peers, adversely affects their health. There is empirical evidence to support the relative income hypothesis, showing a negative statistical relationship between income inequality and health. The literature is unsettled on the relevant level of geography to measure income inequality, as well as other control variables in the estimation. This paper contributes to this literature by asking how state level income inequality affects the probability of an individual having excellent self-reported health. The relative income hypothesis is tested using individual level data from the Current Population Survey in the United States, and is supplemented with state level income inequality and healthcare spending data from 1996-2009. A logit model with clustered standard errors is employed, with marginal effects reported. Results suggest no statistically significant effects within the full sample. However, if the analysis is restricted to the five most or least equal states, there is a statistically significant relationship between income inequality and health. The most equal states exhibit a positive (but small) relationship between inequality and health, while the least equal exhibit a negative (but small) relationship. While a statistically significant association is found for these samples, the point estimates are not economically significant. The results are robust to the specific income inequality measure, lag structure of income inequality, and time period of analysis. The results do not support the relative income hypothesis. The implication is the effect of income inequality on health may be overstated

Suggested Citation

  • Loree, Jacob, 2015. "State Level Income Inequality and Individual Self-Reported Health Status: Evidence from the United States," MPRA Paper 72638, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:72638
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/72638/1/MPRA_paper_72638.pdf
    File Function: original version
    Download Restriction: no

    References listed on IDEAS

    as
    1. Cutler, David M & Richardson, Elizabeth, 1998. "The Value of Health: 1970-1990," American Economic Review, American Economic Association, vol. 88(2), pages 97-100, May.
    2. Ulf-G. Gerdtham & Magnus Johannesson, 2004. "Absolute Income, Relative Income, Income Inequality, and Mortality," Journal of Human Resources, University of Wisconsin Press, vol. 39(1).
    3. Angus Deaton, 2003. "Health, Inequality, and Economic Development," Journal of Economic Literature, American Economic Association, vol. 41(1), pages 113-158, March.
    4. Markus Jäntti & Stephen Jenkins, 2010. "The impact of macroeconomic conditions on income inequality," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 8(2), pages 221-240, June.
    5. A. Colin Cameron & Jonah B. Gelbach & Douglas L. Miller, 2008. "Bootstrap-Based Improvements for Inference with Clustered Errors," The Review of Economics and Statistics, MIT Press, vol. 90(3), pages 414-427, August.
    6. Lopez, Russ, 2004. "Income inequality and self-rated health in US metropolitan areas: A multi-level analysis," Social Science & Medicine, Elsevier, vol. 59(12), pages 2409-2419, December.
    7. Jennifer M. Mellor & Jeffrey Milyo, 2002. "Individual Health Status and Minority Racial Concentration in U.S. States and Counties," Working Papers 0201, Harris School of Public Policy Studies, University of Chicago.
    8. repec:aph:ajpbhl:2003:93:8:1287-1293_5 is not listed on IDEAS
    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. Miles Corak, 2013. "Income Inequality, Equality of Opportunity, and Intergenerational Mobility," Journal of Economic Perspectives, American Economic Association, vol. 27(3), pages 79-102, Summer.
    11. Ettner, Susan L., 1996. "New evidence on the relationship between income and health," Journal of Health Economics, Elsevier, vol. 15(1), pages 67-85, February.
    12. Harvey, James, 2005. "A note on the 'natural rate of subjective inequality' hypothesis and the approximate relationship between the Gini coefficient and the Atkinson index," Journal of Public Economics, Elsevier, vol. 89(5-6), pages 1021-1025, June.
    13. Robert J. Waldmann, 1992. "Income Distribution and Infant Mortality," The Quarterly Journal of Economics, Oxford University Press, vol. 107(4), pages 1283-1302.
    14. Karlsson, Martin & Nilsson, Therese & Lyttkens, Carl Hampus & Leeson, George, 2010. "Income inequality and health: Importance of a cross-country perspective," Social Science & Medicine, Elsevier, vol. 70(6), pages 875-885, March.
    15. Smith, James P, 1998. "Socioeconomic Status and Health," American Economic Review, American Economic Association, vol. 88(2), pages 192-196, May.
    16. A. Colin Cameron & Pravin K. Trivedi, 2010. "Microeconometrics Using Stata, Revised Edition," Stata Press books, StataCorp LP, number musr.
    17. James P. Smith, 1999. "Healthy Bodies and Thick Wallets: The Dual Relation between Health and Economic Status," Journal of Economic Perspectives, American Economic Association, vol. 13(2), pages 145-166, Spring.
    18. repec:aph:ajpbhl:2001:91:2:277-283_1 is not listed on IDEAS
    19. Groot, Wim, 2000. "Adaptation and scale of reference bias in self-assessments of quality of life," Journal of Health Economics, Elsevier, vol. 19(3), pages 403-420, May.
    20. Wilkinson, Richard G. & Pickett, Kate E., 2007. "The problems of relative deprivation: Why some societies do better than others," Social Science & Medicine, Elsevier, vol. 65(9), pages 1965-1978, November.
    21. Gerdtham, Ulf-G. & Johannesson, Magnus, 2000. "Income-related inequality in life-years and quality-adjusted life-years," Journal of Health Economics, Elsevier, vol. 19(6), pages 1007-1026, November.
    22. Theil, Henri, 1979. "The measurement of inequality by components of income," Economics Letters, Elsevier, vol. 2(2), pages 197-199.
    23. Karlsdotter, Kristina & Martín Martín, José J. & López del Amo González, M. Puerto, 2012. "Multilevel analysis of income, income inequalities and health in Spain," Social Science & Medicine, Elsevier, vol. 74(7), pages 1099-1106.
    24. repec:aph:ajpbhl:2004:94:6:1043-1048_1 is not listed on IDEAS
    25. Paula K. Lorgelly & Joanne Lindley, 2008. "What is the relationship between income inequality and health? Evidence from the BHPS," Health Economics, John Wiley & Sons, Ltd., vol. 17(2), pages 249-265.
    26. Doorslaer, Eddy van & Jones, Andrew M., 2003. "Inequalities in self-reported health: validation of a new approach to measurement," Journal of Health Economics, Elsevier, vol. 22(1), pages 61-87, January.
    27. Atkinson, Anthony B., 1970. "On the measurement of inequality," Journal of Economic Theory, Elsevier, vol. 2(3), pages 244-263, September.
    28. Le Grand, Julian, 1987. "Inequalities in health : Some international comparisons," European Economic Review, Elsevier, vol. 31(1-2), pages 182-191.
    29. Rostila, Mikael & Kölegård, Maria L. & Fritzell, Johan, 2012. "Income inequality and self-rated health in Stockholm, Sweden: A test of the ‘income inequality hypothesis’ on two levels of aggregation," Social Science & Medicine, Elsevier, vol. 74(7), pages 1091-1098.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Gini Coefficient; Health Inequality; Income Inequality; Self-reported Health;

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • I14 - Health, Education, and Welfare - - Health - - - Health and Inequality

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:72638. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Joachim Winter). General contact details of provider: http://edirc.repec.org/data/vfmunde.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.