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Socioeconomic Status and Health Outcomes in a Developing Country

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While the relationship between socioeconomic status (SES) and health is well documented for developed countries, less evidence has been presented for developing countries. The aim of this paper is to analyse this relationship at the household level for Fiji, a developing country in the South Pacific, using original household survey data. To allow for the endogeneity of SES status in the household health production function we utilize a simultaneous equation approach where estimates are achieved by full information maximum likelihood. By restricting our sample to one, relatively small island, and including area and district hospital effects, physical geography effects are unpacked from income effects. We measure SES, as permanent income which is constructed using principal components analysis. An alternative specification considers transitory household income. We find that a 1% increase in wealth (our measure of permanent income) would lead to a 15% decrease in the probability of an incapacitating illness occurring intra-household. While presence of a strong causal relationship indicates that relatively small improvements in SES status can significantly improve health at the household level, it is argued that the design of appropriate policy would also require an understanding of the various mechanisms through which the relationship operates.

Suggested Citation

  • Grace Lordan & Eliana Jimenez Soto & Richard Brown & Ignacio Correa-Valez, 2011. "Socioeconomic Status and Health Outcomes in a Developing Country," Discussion Papers Series 418, School of Economics, University of Queensland, Australia.
  • Handle: RePEc:qld:uq2004:418
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    1. Brück, Tilman & Danzer, Alexander M. & Muravyev, Alexander & Weisshaar, Natalia, 2010. "Poverty during transition: Household survey evidence from Ukraine," Journal of Comparative Economics, Elsevier, pages 123-145.
    2. Paul Contoyannis & Andrew M. Jones & Nigel Rice, 2004. "The dynamics of health in the British Household Panel Survey," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 19(4), pages 473-503.
    3. Paul Contoyannis & Martin Forster, 1999. "'Our healthier nation'?," Health Economics, John Wiley & Sons, Ltd., vol. 8(4), pages 289-296.
    4. Adam Wagstaff & Naoko Watanabe, 2003. "What difference does the choice of SES make in health inequality measurement?," Health Economics, John Wiley & Sons, Ltd., vol. 12(10), pages 885-890.
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    Cited by:

    1. Sapkota, Pratikshya & Bastola, Umesh & Marsh, Thomas L., 2015. "Role Of Food Insecurity And Women’S Autonomy On Child Health: Empirical Evidence From Nepal," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 205721, Agricultural and Applied Economics Association;Western Agricultural Economics Association.
    2. Yia-Wun Liang & Wen-Yi Chen & Yu-Hui Lin, 2015. "Estimating a Hospital Production Function to Evaluate the Effect of Nurse Staffing on Patient Mortality in Taiwan: The Longitudinal Count Data Approach," Journal for Economic Forecasting, Institute for Economic Forecasting, pages 154-169.

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