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Do Poor People Have a Stronger Relationship between Income and Mortality Than the Rich? Implications of Panel Data for Health-Health Analysis

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  • Chapman, Kenneth S
  • Hariharan, Govind

Abstract

Articles developing health-health analysis have used the observation that richer people tend to face reduced mortality risk to estimate the break-even cost per life saved of health regulations. If government requires that the private sector spend more than this break-even cutoff, the risk of dying due to reduced health investment is increased by more than it will be reduced by the direct action of the health regulation. We use panel data to suggest that the relationship between income and the probability of death is greater for poor people than for the rich. As a consequence, break-even cutoffs are roughly twice as large for the richest 20 percent of the population than they are for the poorest 20 percent. The nonlinearity in the income-to-mortality linkage also implies that income transfers between income groups which are ignored in traditional cost-benefit analysis will affect the conclusions of health-health analysis significantly. Copyright 1996 by Kluwer Academic Publishers

Suggested Citation

  • Chapman, Kenneth S & Hariharan, Govind, 1996. "Do Poor People Have a Stronger Relationship between Income and Mortality Than the Rich? Implications of Panel Data for Health-Health Analysis," Journal of Risk and Uncertainty, Springer, vol. 12(1), pages 51-63, January.
    • Handle: RePEc:kap:jrisku:v:12:y:1996:i:1:p:51-63
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    Citations

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    Cited by:

    1. James K. Hammitt, 2020. "Valuing mortality risk in the time of COVID-19," Journal of Risk and Uncertainty, Springer, vol. 61(2), pages 129-154, October.
    2. James Broughel & W. Kip Viscusi, 2021. "The Mortality Cost Of Expenditures," Contemporary Economic Policy, Western Economic Association International, vol. 39(1), pages 156-167, January.
    3. Raucher Robert S. & Rubin Scott J & Crawford-Brown Douglas & Lawson Megan M., 2011. "Benefit-Cost Analysis for Drinking Water Standards: Efficiency, Equity, and Affordability Considerations in Small Communities," Journal of Benefit-Cost Analysis, De Gruyter, vol. 2(1), pages 1-24, January.
    4. Broughel, James & Chambers, Dustin, 2021. "Federal Regulation and Mortality in the 50 States," Working Papers 10289, George Mason University, Mercatus Center.
    5. Kahouli, Sondès, 2020. "An economic approach to the study of the relationship between housing hazards and health: The case of residential fuel poverty in France," Energy Economics, Elsevier, vol. 85(C).
    6. Kuchler, Fred & Golan, Elise H., 1999. "Assigning Values To Life: Comparing Methods For Valuing Health Risks," Agricultural Economic Reports 34037, United States Department of Agriculture, Economic Research Service.
    7. J.C. Herbert Emery & Jesse A. Matheson, 2012. "Should income transfers be targeted or universal? Insights from public pension influences on elderly mortality in Canada, 1921-1966," Canadian Journal of Economics, Canadian Economics Association, vol. 45(1), pages 247-269, February.
    8. Andrew J.G. Cairns & Malene Kallestrup-Lamb & Carsten P.T. Rosenskjold & David Blake & Kevin Dowd, 2016. "Modelling Socio-Economic Differences in the Mortality of Danish Males Using a New Affluence Index," CREATES Research Papers 2016-14, Department of Economics and Business Economics, Aarhus University.
    9. Jared C. Carbone & Snorre Kverndokk, 2016. "Individual Investments in Education and Health: Policy Responses and Interactions," CESifo Working Paper Series 6154, CESifo.
    10. Patrick Hofstetter & Jane C. Bare & James K. Hammitt & Patricia A. Murphy & Glenn E. Rice, 2002. "Tools for Comparative Analysis of Alternatives: Competing or Complementary Perspectives?," Risk Analysis, John Wiley & Sons, vol. 22(5), pages 833-851, October.
    11. Olga Yakusheva & Eline van den Broek-Altenburg & Gayle Brekke & Adam Atherly, 2022. "Lives saved and lost in the first six month of the US COVID-19 pandemic: A retrospective cost-benefit analysis," PLOS ONE, Public Library of Science, vol. 17(1), pages 1-12, January.
    12. Damian Walczak & Jacek Wantoch-Rekowski & Robert Marczak, 2021. "Impact of Income on Life Expectancy: A Challenge for the Pension Policy," Risks, MDPI, vol. 9(4), pages 1-13, April.
    13. Viscusi W. Kip, 2019. "The Mortality Cost Metric for the Costs of War," Peace Economics, Peace Science, and Public Policy, De Gruyter, vol. 25(3), pages 1-10, September.
    14. Carbone, Jared C. & Kverndokk, Snorre, 2014. "Individual investments in education and health," HERO Online Working Paper Series 2014:1, University of Oslo, Health Economics Research Programme.
    15. repec:clg:wpaper:2011-02 is not listed on IDEAS
    16. James K. Hammitt & Eric S. Belsky & Jonathan I. Levy & John D. Graham, 1999. "Residential Building Codes, Affordability, and Health Protection: A Risk‐Tradeoff Approach," Risk Analysis, John Wiley & Sons, vol. 19(6), pages 1037-1058, December.

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