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"I'm afraid I have bad news for you…" Estimating the impact of different health impairments on subjective well-being

  • Martin Binder

    ()

    (Max Planck Institute of Economics)

  • Alex Coad

    (Max Planck Institute of Economics
    SPRU, University of Sussex
    RATIO, Stockholm, Sweden)

Bad health decreases individuals' happiness, but few studies measure the impact of specific illnesses. We apply matching estimators to examine how changes in different (objective) conditions of bad health affect subjective well-being for a sample of 100,265 observations from the British Household Panel Survey (BHPS) database (1996–2006). The strongest effect is for alcohol and drug abuse, followed by anxiety, depression and other mental illnesses, stroke and cancer. Adaptation to health impairments varies across health impairments. There is also a puzzling asymmetry: strong adverse reactions to deteriorations in health appear alongside weak increases in well-being after health improvements. In conclusion, our analysis offers a more detailed account of how bad health influences happiness than accounts focusing on how bad self-assessed health affects individual well-being.

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Paper provided by SPRU - Science and Technology Policy Research, University of Sussex in its series SPRU Working Paper Series with number 200.

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Length: 29 pages
Date of creation: 13 May 2012
Handle: RePEc:sru:ssewps:200
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