Income, Income Inequality and Health: What can we Learn from Aggregate Data?
It has been suggested that, especially in countries with high per capita income, there is an independent effect of income distribution on the health of individuals. One source of evidence in support of this relative income hypothesis are analyses of aggregate cross section data on population health, per capita income and income inequality. We examine the empirical robustness of cross-section analyses by using a new data set to replicate and extend the approach in a frequently cited paper. We find that the estimated relationship between income inequality and life expectancy is dependent on the data set used, the functional form estimated and the way in which the epidemiological transition is specifed. The association is never significant in any of our models. We argue there are serious methodological difficulties in using aggregate cross sections as means of testing hypotheses about the effect of income, and its distribution, on the health of individuals.
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- Deininger, Klaus & Squire, Lyn, 1996.
"A New Data Set Measuring Income Inequality,"
World Bank Economic Review,
World Bank Group, vol. 10(3), pages 565-91, September.
- Hongyi Li & Lyn Squire & Tao Zhang & Heng-fu Zou, 1999. "A Data Set on Income Distribution," CEMA Working Papers 575, China Economics and Management Academy, Central University of Finance and Economics.
- Klaus Deininger & Lyn Squire, 1996. "A New Data Set Measuring Income Inequality," CEMA Working Papers 512, China Economics and Management Academy, Central University of Finance and Economics.
- Godfrey, Leslie G & McAleer, Michael & McKenzie, Colin R, 1988. "Variable Addition and LaGrange Multiplier Tests for Linear and Logarithmic Regression Models," The Review of Economics and Statistics, MIT Press, vol. 70(3), pages 492-503, August.
- Ettner, Susan L., 1996. "New evidence on the relationship between income and health," Journal of Health Economics, Elsevier, vol. 15(1), pages 67-85, February.
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