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Why the Rich drink more but smoke less: The Impact of Wealth on Health Behaviors

Author

Listed:
  • Hans van Kippersluis

    (Erasmus University Rotterdam)

  • Titus J. Galama

    (University of Southern California, Dornsife College Center for Economic and Social Research & RAND Corporation, USA)

Abstract

This discussion paper resulted in the publication 'Wealth and Health Behavior: Testing the Concept of a Health Cost' (2014). Volume 72, pages 197-220. Wealthier individuals engage in healthier behavior. This paper seeks to explain this phenomenon by developing a theory of health behavior, and exploiting both lottery winnings and inheritances to test the theory. We distinguish between the direct monetary cost and the indirect health cost (value of health lost) of unhealthy consumption. The health cost increases with wealth and the degree of unhealthiness, leading wealthier individuals to consume more healthy and moderately unhealthy, but fewer severely unhealthy goods. The empirical evidence presented suggests that differences in health costs may indeed provide an explanation for behavioral differences, and ultimately health outcomes, between wealth groups.

Suggested Citation

  • Hans van Kippersluis & Titus J. Galama, 2013. "Why the Rich drink more but smoke less: The Impact of Wealth on Health Behaviors," Tinbergen Institute Discussion Papers 13-035/V, Tinbergen Institute.
  • Handle: RePEc:tin:wpaper:20130035
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    File URL: http://papers.tinbergen.nl/13035.pdf
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Benedicte Apouey & Andrew E. Clark, 2015. "Winning Big but Feeling no Better? The Effect of Lottery Prizes on Physical and Mental Health," Health Economics, John Wiley & Sons, Ltd., vol. 24(5), pages 516-538, May.
    2. Titus J. Galama & Hans van Kippersluis, 2013. "Health Inequalities through the Lens of Health Capital Theory: Issues, Solutions, and Future Directions," Tinbergen Institute Discussion Papers 13-076/V, Tinbergen Institute.
    3. Owen O'Donnell & Eddy Van Doorslaer & Tom Van Ourti, 2013. "Health and Inequality," Tinbergen Institute Discussion Papers 13-170/V, Tinbergen Institute.
    4. Erixson, Oscar, 2014. "Health Responses to a Wealth Shock: Evidence from a Swedish Tax Reform," Working Paper Series 1011, Research Institute of Industrial Economics.

    More about this item

    Keywords

    consumption; health; health capital; health behavior; wealth;

    JEL classification:

    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • I10 - Health, Education, and Welfare - - Health - - - General
    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • I14 - Health, Education, and Welfare - - Health - - - Health and Inequality
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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