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The importance of individual heterogeneity in the decomposition of measures of socioeconomic inequality in health: An approach based on quantile regression

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  • Andrew M. Jones
  • Ángel López-Nicolás

Abstract

This paper shows how recently developed regression-based methods for the decomposition of health inequality can be extended to incorporate individual heterogeneity in the responses of health to the explanatory variables. We illustrate our method with an application to the Canadian NPHS of 1994. Our strategy for the estimation of heterogeneous responses is based on the quantile regression model. The results suggest that there is an important degree of heterogeneity in the association of health to explanatory variables which, in turn, accounts for a substantial percentage of inequality in observed health. A particularly interesting finding is that the marginal response of health to income is zero for healthy individuals but positive and significant for unhealthy individuals. The heterogeneity in the income response reduces both overall health inequality and income related health inequality.

Suggested Citation

  • Andrew M. Jones & Ángel López-Nicolás, 2002. "The importance of individual heterogeneity in the decomposition of measures of socioeconomic inequality in health: An approach based on quantile regression," Working Papers, Research Center on Health and Economics 626, Department of Economics and Business, Universitat Pompeu Fabra.
  • Handle: RePEc:upf:upfses:626
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    References listed on IDEAS

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    Cited by:

    1. Costa-Font, Montserrat & Costa-Font, Joan, 2009. "Heterogeneous 'adaptation' and 'income effects' across self-reported health distribution?," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 38(4), pages 574-580, August.
    2. Villar, Jaume García & Raya, Josep Maria, 2015. "Use of a Gini index to examine housing price heterogeneity: A quantile approach," Journal of Housing Economics, Elsevier, vol. 29(C), pages 59-71.
    3. Dasgupta, Aparajita, 2014. "Systematic Measurement Error in Self-Reported Health: Is anchoring vignettes the way out?," MPRA Paper 58722, University Library of Munich, Germany.

    More about this item

    Keywords

    Health inequalities; unobserved heterogeneity; quantile regression;

    JEL classification:

    • C13 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Estimation: General
    • C15 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Statistical Simulation Methods: General
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior

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