Publication type
Conference Paper
Series
BHPS-2009 Conference: the 2009 British Household Panel Survey Research Conference, 9-11 July 2009, Colchester, UK
Authors
Publication date
June 1, 2009
Abstract:
We use British Household Panel Survey data to explore the exogenous impact of income on a number of individual health outcomes: general health status, mental health, physical health problems, and behavioural variables (alcohol consumption and smoking). Lottery winnings allow us to make causal statements regarding the effect of income on health, as these are largely unanticipated and therefore exogenous. These positive income shocks have no significant effect on general health, but a large positive effect on mental health, supporting recent findings in the literature. This result seems paradoxical on two levels. First, there is a well-known status gradient in health in cross-section data, and, second, general health should partly reflect mental health, so that we may expect both variables to move in the same direction. We propose a solution to the first apparent paradox by underlining the endogeneity of income. For the second, we show that income actually has a negative effect on risky behaviours:lottery winners smoke more and engage in more social drinking. General health will pick up both mental and behavioural elements, which move in opposite directions following a positive income shock. This paper presents the first microeconomic analogue of previous work which has highlighted the negative health consequences of good macroeconomic conditions
Subjects
Link
- http://www.iser.essex.ac.uk/events/conferences/bhps-2009-conference/programme
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