IDEAS home Printed from https://ideas.repec.org/a/eee/wdevel/v66y2015icp500-515.html
   My bibliography  Save this article

Income and Health in Tanzania. An Instrumental Variable Approach

Author

Listed:
  • Fichera, Eleonora
  • Savage, David

Abstract

There is a substantial debate over the direction of the causal relation between income and health. This is important for our understanding of the health production process and for the policy debate over improving healthcare. We instrument income with rainfall measurements by matching satellite information on timing and positioning of 21 rainfall stations to longitudinal data (1991–94) of over 4,000 individuals in 51 villages in Tanzania. A 10% increase in income reduces the number of illnesses by 0.02. We also find that a 10% increase in income implies an increase of about 0.1 vaccinations of children under six.

Suggested Citation

  • Fichera, Eleonora & Savage, David, 2015. "Income and Health in Tanzania. An Instrumental Variable Approach," World Development, Elsevier, vol. 66(C), pages 500-515.
    • Handle: RePEc:eee:wdevel:v:66:y:2015:i:c:p:500-515
    DOI: 10.1016/j.worlddev.2014.09.016
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0305750X14002812
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.worlddev.2014.09.016?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Grant Miller & B. Piedad Urdinola, 2010. "Cyclicality, Mortality, and the Value of Time: The Case of Coffee Price Fluctuations and Child Survival in Colombia," Journal of Political Economy, University of Chicago Press, vol. 118(1), pages 113-155, February.
    2. Kleibergen, Frank & Paap, Richard, 2006. "Generalized reduced rank tests using the singular value decomposition," Journal of Econometrics, Elsevier, vol. 133(1), pages 97-126, July.
    3. Bengtsson, Niklas, 2010. "How responsive is body weight to transitory income changes? Evidence from rural Tanzania," Journal of Development Economics, Elsevier, vol. 92(1), pages 53-61, May.
    4. 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.
    5. Terza, Joseph V. & Basu, Anirban & Rathouz, Paul J., 2008. "Two-stage residual inclusion estimation: Addressing endogeneity in health econometric modeling," Journal of Health Economics, Elsevier, vol. 27(3), pages 531-543, May.
    6. Stephen Wu, 2003. "The Effects of Health Events on the Economic Status of Married Couples," Journal of Human Resources, University of Wisconsin Press, vol. 38(1).
    7. Christopher F Baum & Mark E. Schaffer & Steven Stillman, 2007. "Enhanced routines for instrumental variables/GMM estimation and testing," CERT Discussion Papers 0706, Centre for Economic Reform and Transformation, Heriot Watt University.
    8. Takashi Yamano & Harold Alderman & Luc Christiaensen, 2005. "Child Growth, Shocks, and Food Aid in Rural Ethiopia," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 87(2), pages 273-288.
    9. Christopher F Baum & Mark E. Schaffer & Steven Stillman, 2007. "Enhanced routines for instrumental variables/generalized method of moments estimation and testing," Stata Journal, StataCorp LP, vol. 7(4), pages 465-506, December.
    10. James P. Smith, 1999. "Healthy Bodies and Thick Wallets: The Dual Relation between Health and Economic Status," Journal of Economic Perspectives, American Economic Association, vol. 13(2), pages 145-166, Spring.
    11. Melissa Dell & Benjamin F. Jones & Benjamin A. Olken, 2009. "Temperature and Income: Reconciling New Cross-Sectional and Panel Estimates," American Economic Review, American Economic Association, vol. 99(2), pages 198-204, May.
    12. Orazio P. Attanasio & Hilary Williamson Hoynes, 2000. "Differential Mortality and Wealth Accumulation," Journal of Human Resources, University of Wisconsin Press, vol. 35(1), pages 1-29.
    13. Melissa Dell & Benjamin F. Jones & Benjamin A. Olken, 2014. "What Do We Learn from the Weather? The New Climate-Economy Literature," Journal of Economic Literature, American Economic Association, vol. 52(3), pages 740-798, September.
    14. Stefan Dercon, 2002. "Income Risk, Coping Strategies, and Safety Nets," The World Bank Research Observer, World Bank, vol. 17(2), pages 141-166, September.
    15. Thurlow, James & Wobst, Peter, 2003. "Poverty-focused social accounting matrices for Tanzania," TMD discussion papers 112, International Food Policy Research Institute (IFPRI).
    16. Datar, Ashlesha & Liu, Jenny & Linnemayr, Sebastian & Stecher, Chad, 2013. "The impact of natural disasters on child health and investments in rural India," Social Science & Medicine, Elsevier, vol. 76(C), pages 83-91.
    17. Olivier Deschênes & Michael Greenstone, 2011. "Climate Change, Mortality, and Adaptation: Evidence from Annual Fluctuations in Weather in the US," American Economic Journal: Applied Economics, American Economic Association, vol. 3(4), pages 152-185, October.
    18. Mark B. McClellan, 1998. "Health Events, Health Insurance, and Labor Supply: Evidence from the Health and Retirement Survey," NBER Chapters, in: Frontiers in the Economics of Aging, pages 301-350, National Bureau of Economic Research, Inc.
    19. Salvatore Di Falco & Mahmud Yesuf & Gunnar Kohlin & Claudia Ringler, 2012. "Estimating the Impact of Climate Change on Agriculture in Low-Income Countries: Household Level Evidence from the Nile Basin, Ethiopia," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 52(4), pages 457-478, August.
    20. Elaina Rose, 1999. "Consumption Smoothing and Excess Female Mortality in Rural India," The Review of Economics and Statistics, MIT Press, vol. 81(1), pages 41-49, February.
    21. Robert B. Barsky & F. Thomas Juster & Miles S. Kimball & Matthew D. Shapiro, 1997. "Preference Parameters and Behavioral Heterogeneity: An Experimental Approach in the Health and Retirement Study," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 112(2), pages 537-579.
    22. Edoka, I., 2013. "Weather shocks and nutritional status of disadvantaged children in Vietnam," Health, Econometrics and Data Group (HEDG) Working Papers 13/10, HEDG, c/o Department of Economics, University of York.
    23. Edward Miguel & Shanker Satyanath & Ernest Sergenti, 2004. "Economic Shocks and Civil Conflict: An Instrumental Variables Approach," Journal of Political Economy, University of Chicago Press, vol. 112(4), pages 725-753, August.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Baulia, Susmita, 2024. "Is household shock a boon or bane to the utilisation of preventive healthcare for children? Evidence from Uganda," Economics & Human Biology, Elsevier, vol. 52(C).
    2. Munford, Luke A. & Fichera, Eleonora & Sutton, Matt, 2020. "Is owning your home good for your health? Evidence from exogenous variations in subsidies in England," Economics & Human Biology, Elsevier, vol. 39(C).
    3. Jiwei Chen, 2021. "Do minimum wage increases benefit worker health? Evidence from China," Review of Economics of the Household, Springer, vol. 19(2), pages 473-499, June.
    4. Jia Wu & Jiada Lin & Xiao Han, 2023. "Compensation for girls in early childhood and its long-run impact: family investment strategies under rainfall shocks," Journal of Population Economics, Springer;European Society for Population Economics, vol. 36(3), pages 1225-1268, July.
    5. Myerson, Rebecca & Lu, Tianyi & Yuan, Yong & Liu, Gordon, 2020. "The impact of government income transfers on tobacco and alcohol use: Evidence from China," Economics Letters, Elsevier, vol. 186(C).
    6. Kathrin Durizzo & Kenneth Harttgen & Fabrizio Tediosi & Maitreyi Sahu & August Kuwawenaruwa & Paola Salari & Isabel Günther, 2022. "Toward mandatory health insurance in low‐income countries? An analysis of claims data in Tanzania," Health Economics, John Wiley & Sons, Ltd., vol. 31(10), pages 2187-2207, October.
    7. Parantap Basu & Sigit Sulistiyo Wibowo, 2015. "An Empirical Investigation of Risk Sharing among Indonesian Households," CEGAP Working Papers 2015_02, Durham University Business School.
    8. Julien Albertini & Anthony Terriau, 2019. "Wealth and health in South Africa," Working Papers halshs-02073800, HAL.
    9. Lohmann, Steffen & Lechtenfeld, Tobias, 2015. "The Effect of Drought on Health Outcomes and Health Expenditures in Rural Vietnam," World Development, Elsevier, vol. 72(C), pages 432-448.
    10. Susmita Baulia, 2018. "Is household shock a boon or bane to the utilisation of preventive healthcare for children? Evidence from Uganda," Discussion Papers 121, Aboa Centre for Economics.
    11. Olukorede Abiona, 2017. "The Impact of Unanticipated Economic Shocks on the Demand for Contraceptives: Evidence from Uganda," Health Economics, John Wiley & Sons, Ltd., vol. 26(12), pages 1696-1709, December.
    12. Magambo, Isaiah & Dikgang, Johane & Gelo, Dambala & Tregenna, Fiona, 2021. "Gold-Mining Pollution Exposure, Health Effects and Private Healthcare Expenditure in Tanzania," MPRA Paper 108800, University Library of Munich, Germany.
    13. Beatrice Baaba Tawiah, 2023. "The Effect of Children on Health," Working Papers Dissertations 103, Paderborn University, Faculty of Business Administration and Economics.
    14. Schmitz, Hendrik & Tawiah, Beatrice Baaba, 2023. "Life-cycle health effects of compulsory schooling," Ruhr Economic Papers 1006, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    15. Humaira Kamal Pasha, 2024. "Gender Differences in Education: Are Girls Neglected in Pakistani Society?," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 15(1), pages 3466-3511, March.
    16. Obadia Kyetuza Bishoge & Benatus Norbert Mvile, 2020. "The “resource curse” from the oil and natural gas sector: how can Tanzania avoid it in reality?," Mineral Economics, Springer;Raw Materials Group (RMG);Luleå University of Technology, vol. 33(3), pages 389-404, October.
    17. Sundar Ponnusamy, 2022. "Rainfall shocks, child mortality, and water infrastructure," Health Economics, John Wiley & Sons, Ltd., vol. 31(7), pages 1317-1338, July.
    18. Ren, Yanjun & Castro Campos, Bente & Loy, Jens-Peter & Brosig, Stephan, 2019. "Low-income and overweight in China: Evidence from a life-course utility model," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 18(8), pages 1753-1767.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Meer, Jonathan & Miller, Douglas L. & Rosen, Harvey S., 2003. "Exploring the health-wealth nexus," Journal of Health Economics, Elsevier, vol. 22(5), pages 713-730, September.
    2. Hanandita, Wulung & Tampubolon, Gindo, 2014. "Does poverty reduce mental health? An instrumental variable analysis," Social Science & Medicine, Elsevier, vol. 113(C), pages 59-67.
    3. Peter Adams & Michael D. Hurd & Daniel L. McFadden & Angela Merrill & Tiago Ribeiro, 2004. "Healthy, Wealthy, and Wise? Tests for Direct Causal Paths between Health and Socioeconomic Status," NBER Chapters, in: Perspectives on the Economics of Aging, pages 415-526, National Bureau of Economic Research, Inc.
    4. Letta, Marco & Montalbano, Pierluigi & Tol, Richard S.J., 2018. "Temperature shocks, short-term growth and poverty thresholds: Evidence from rural Tanzania," World Development, Elsevier, vol. 112(C), pages 13-32.
    5. David Castells-Quintana & Maria del Pilar Lopez-Uribe & Tom McDermott, 2015. "Climate change and the geographical and institutional drivers of economic development," GRI Working Papers 198, Grantham Research Institute on Climate Change and the Environment.
    6. Nicholas J. Sanders, 2012. "What Doesn’t Kill You Makes You Weaker: Prenatal Pollution Exposure and Educational Outcomes," Journal of Human Resources, University of Wisconsin Press, vol. 47(3), pages 826-850.
    7. Owen O'Donnell & Eddy Van Doorslaer & Tom Van Ourti, 2013. "Health and Inequality," Tinbergen Institute Discussion Papers 13-170/V, Tinbergen Institute.
    8. Lopez-Uribe, Maria del Pilar & Castells-Quintana, David & McDermott, Thomas K. J., 2017. "Geography, institutions and development: a review ofthe long-run impacts of climate change," LSE Research Online Documents on Economics 65147, London School of Economics and Political Science, LSE Library.
    9. Oscar Erixson, 2017. "Health responses to a wealth shock: evidence from a Swedish tax reform," Journal of Population Economics, Springer;European Society for Population Economics, vol. 30(4), pages 1281-1336, October.
    10. Sekhri, Sheetal & Storeygard, Adam, 2014. "Dowry deaths: Response to weather variability in India," Journal of Development Economics, Elsevier, vol. 111(C), pages 212-223.
    11. Akresh, Richard & Lucchetti, Leonardo & Thirumurthy, Harsha, 2012. "Wars and child health: Evidence from the Eritrean–Ethiopian conflict," Journal of Development Economics, Elsevier, vol. 99(2), pages 330-340.
    12. de Souza, Joao Paulo A., 2015. "Evidence of growth complementarity between agriculture and industry in developing countries," Structural Change and Economic Dynamics, Elsevier, vol. 34(C), pages 1-18.
    13. Chen, Chun-Chih & Chen, Chin-Shyan & Liu, Tsai-Ching & Lin, Ying-Tzu, 2012. "Stock or stroke? Stock market movement and stroke incidence in Taiwan," Social Science & Medicine, Elsevier, vol. 75(11), pages 1974-1980.
    14. Chulhee Lee, 2003. "Health and Wealth Accumulation: Evidence from Nineteenth-Century America," NBER Working Papers 10035, National Bureau of Economic Research, Inc.
    15. Naser Amanzadeh & Toshi H. Arimura & Mohammad Vesal & Seyed Farshad Fatemi Ardestani, 2021. "The Distributional Effects of Climate Change:Evidence from Iran," RIEEM Discussion Paper Series 2007, Research Institute for Environmental Economics and Management, Waseda University.
    16. Jean-François Maystadt & Olivier Ecker, 2014. "Extreme Weather and Civil War: Does Drought Fuel Conflict in Somalia through Livestock Price Shocks?," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 96(4), pages 1157-1182.
    17. de Souza, Joao Paulo A., 2014. "Growth Complementarity Between Agriculture and Industry: Evidence from a Panel of Developing Countries," UMASS Amherst Economics Working Papers 2014-11, University of Massachusetts Amherst, Department of Economics.
    18. Melissa Dell & Benjamin F. Jones & Benjamin A. Olken, 2014. "What Do We Learn from the Weather? The New Climate-Economy Literature," Journal of Economic Literature, American Economic Association, vol. 52(3), pages 740-798, September.
    19. Hsing-Hsiang Huang & Michael R. Moore, 2018. "Farming under Weather Risk: Adaptation, Moral Hazard, and Selection on Moral Hazard," NBER Chapters, in: Agricultural Productivity and Producer Behavior, pages 77-124, National Bureau of Economic Research, Inc.
    20. Austin L. Wright, 2016. "Economic Shocks and Rebel," HiCN Working Papers 232, Households in Conflict Network.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:wdevel:v:66:y:2015:i:c:p:500-515. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/worlddev .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.