The effect of income on health: evidence from the poverty gaps analysis method in the sub-Saharan Africa

This paper examines the income gradient in health in the sub-Saharan Africa (SSA) using aggregate data. The paper contributes to previous methods by: (1) measuring health poverty and income poverty across the SSA countries; (2) highlighting dynamics and subgroup composition of health poverty relative to sex and income poverty; (3) testing the extent to which health poverty is related to income poverty. Using data from the World Development Indicators over the period from 1980 to 2017, we apply the Foster-Greer-Thorbecke approach at the national level to calculate health and income poverty indicators across the SSA countries. The Granger panel non-causality model and panel error-correction-based cointegration tests are used to analyse the relationship between gaps in health poverty and income poverty. Our study finds that health poverty chronically and temporally occurs among SSA countries, with the female population worse off overall. In most cases, the Granger model finds that income poverty causes health poverty at the national level. Our most important findings highlight that health poverty and income poverty are dynamically and structurally strongly correlated where causality flows from income poverty to health poverty with no cross-country dependence. Our method’s findings support the income gradient in health which is usually demonstrated using health outcome and income outcome relationships. The results highlight that policies aiming to reduce health poverty may focus on income poverty.