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Income, rainfall shocks and health. An instrumental variable approach

Listed author(s):
  • Savage, D.
  • Fichera, E.

We examine whether income shocks affect a range of health outcomes and a preventative behaviour. We instrument income with rainfall measurements by matching satellite information on timing and positioning of 21 rainfall stations to longitudinal data (1991-1994) of over 4,000 individuals in 51 villages of a North Western region in Tanzania. We find a pro-cyclical effect of income on health. A ten percent increase in income reduces by 0.2 the number of illnesses. A further finding is the positive effect on vaccinations of children under six: a ten percent increase in income implies an increase of about one vaccination, from a mean of 2.3 per child, for the four vaccinations of polio, tetanus, tuberculosis and measles. There is also some evidence of a reduction in chronic malnutrition of children under six. Our results suggest the income effect to offset the increased opportunity cost of time in this data.

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Paper provided by HEDG, c/o Department of Economics, University of York in its series Health, Econometrics and Data Group (HEDG) Working Papers with number 13/13.

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Date of creation: Jun 2013
Handle: RePEc:yor:hectdg:13/13
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HEDG/HERC, Department of Economics and Related Studies, University of York, York, YO10 5DD, United Kingdom

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