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The effect of housing wealth on older adults’ health care utilization: Evidence from fluctuations in the U.S. housing market

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  • Tran, My
  • Gannon, Brenda
  • Rose, Christiern

Abstract

Do wealthier individuals use more health care services than those less affluent? Our paper addresses this question by examining the relationship between housing wealth and health care utilization. Exploiting fluctuations in the U.S. housing market, we estimate the effect of unanticipated wealth shocks on older adults’ health care utilization, using county-year variation in house prices to construct an instrumental variable. Using data from the 1996–2016 Health and Retirement Study, we find that an increase in wealth significantly increases numbers of doctor visits, prescription drugs, outpatient surgery, and dental services. Notably, an economic downturn like that in the Great Recession, when housing wealth declined by 16 percent on average, could reduce the utilization of prescription drugs by 0.4 percent, outpatient services by 0.5 percent, dental care by 0.6 percent, and numbers of doctor visits by 0.5 visits annually.

Suggested Citation

  • Tran, My & Gannon, Brenda & Rose, Christiern, 2023. "The effect of housing wealth on older adults’ health care utilization: Evidence from fluctuations in the U.S. housing market," Journal of Health Economics, Elsevier, vol. 88(C).
    • Handle: RePEc:eee:jhecon:v:88:y:2023:i:c:s0167629623000140
    DOI: 10.1016/j.jhealeco.2023.102737
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    More about this item

    Keywords

    Housing wealth; Health care utilization; HRS;
    All these keywords.

    JEL classification:

    • C26 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Instrumental Variables (IV) Estimation
    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination

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