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The effect of income shocks on health behaviors: Evidence from a low-income country

Author

Listed:
  • Nguyen, Cuong Viet
  • Nguyen, Minh Khanh Hoang
  • Phung, Tung Duc
  • Tran, Oanh Ngoc

Abstract

This study examines the income effect on health spending and health behaviors in Vietnam. We measure income shock by lottery prizes, controlling for spending on the lottery. Lottery prizes have no significant effect on the healthcare utilization of individuals. However, we find that lottery winnings result in a significant increase in spending on healthcare. A 1% increase in lottery winnings results in a 0.08% increase in expenditure on medicine and a 0.09% increase in the total amount individuals spend on healthcare. The effect on expenditure on healthcare tends to be larger for older people. A concern with increased income is the unexpected effect on risky health behaviors, such as smoking and drinking. In this study, we do not find that lottery prizes lead to greater spending on tobacco and alcohol.

Suggested Citation

  • Nguyen, Cuong Viet & Nguyen, Minh Khanh Hoang & Phung, Tung Duc & Tran, Oanh Ngoc, 2023. "The effect of income shocks on health behaviors: Evidence from a low-income country," Economic Analysis and Policy, Elsevier, vol. 79(C), pages 257-276.
    • Handle: RePEc:eee:ecanpo:v:79:y:2023:i:c:p:257-276
    DOI: 10.1016/j.eap.2023.06.014
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    References listed on IDEAS

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    More about this item

    Keywords

    Health; Healthcare; Lottery prizes; Income shocks; Vietnam;
    All these keywords.

    JEL classification:

    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • I15 - Health, Education, and Welfare - - Health - - - Health and Economic Development
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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