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Why the Rich drink more but smoke less: The Impact of Wealth on Health Behaviors

Author

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  • Hans van Kippersluis

    (Erasmus University Rotterdam)

  • Titus J. Galama

    (University of Southern California, Dornsife College Center for Economic and Social Research & RAND Corporation, USA)

Abstract

This discussion paper resulted in the publication 'Wealth and Health Behavior: Testing the Concept of a Health Cost' (2014). Volume 72, pages 197-220. Wealthier individuals engage in healthier behavior. This paper seeks to explain this phenomenon by developing a theory of health behavior, and exploiting both lottery winnings and inheritances to test the theory. We distinguish between the direct monetary cost and the indirect health cost (value of health lost) of unhealthy consumption. The health cost increases with wealth and the degree of unhealthiness, leading wealthier individuals to consume more healthy and moderately unhealthy, but fewer severely unhealthy goods. The empirical evidence presented suggests that differences in health costs may indeed provide an explanation for behavioral differences, and ultimately health outcomes, between wealth groups.

Suggested Citation

  • Hans van Kippersluis & Titus J. Galama, 2013. "Why the Rich drink more but smoke less: The Impact of Wealth on Health Behaviors," Tinbergen Institute Discussion Papers 13-035/V, Tinbergen Institute.
    • Handle: RePEc:tin:wpaper:20130035
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Benedicte Apouey & Andrew E. Clark, 2015. "Winning Big but Feeling no Better? The Effect of Lottery Prizes on Physical and Mental Health," Health Economics, John Wiley & Sons, Ltd., vol. 24(5), pages 516-538, May.
    2. Titus J. Galama & Hans van Kippersluis, 2013. "Health Inequalities through the Lens of Health-Capital Theory: Issues, Solutions, and Future Directions," Research on Economic Inequality, in: Health and Inequality, volume 21, pages 263-284, Emerald Group Publishing Limited.
    3. Ohrnberger, Julius & Anselmi, Laura & Fichera, Eleonora & Sutton, Matt, 2020. "The effect of cash transfers on mental health: Opening the black box – A study from South Africa," Social Science & Medicine, Elsevier, vol. 260(C).
    4. Anowor Oluchukwu F.* & Nwonye Nnenna Georgina & Okorie George Chisom & Ojiogu Michael C., 2019. "Health Outcomes and Agricultural Output in Nigeria," International Journal of Economics and Financial Research, Academic Research Publishing Group, vol. 5(5), pages 106-111, 05-2019.
    5. Jelena Arsenijevic & Milena Pavlova & Bernd Rechel & Wim Groot, 2016. "Catastrophic Health Care Expenditure among Older People with Chronic Diseases in 15 European Countries," PLOS ONE, Public Library of Science, vol. 11(7), pages 1-18, July.
    6. 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.
    7. repec:cep:sticar:case/96 is not listed on IDEAS
    8. Owen O'Donnell & Eddy Van Doorslaer & Tom Van Ourti, 2013. "Health and Inequality," Tinbergen Institute Discussion Papers 13-170/V, Tinbergen Institute.
    9. Carlos Alberto Belchior & Yara Gomes, 2022. "Liquidity constraints, cash transfers and the demand for health care in the Covid‐19 pandemic," Health Economics, John Wiley & Sons, Ltd., vol. 31(11), pages 2369-2380, November.
    10. Nicole Au & David W. Johnston, 2015. "Too Much of a Good Thing? Exploring the Impact of Wealth on Weight," Health Economics, John Wiley & Sons, Ltd., vol. 24(11), pages 1403-1421, November.
    11. repec:hal:pseose:halshs-00566789 is not listed on IDEAS

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    More about this item

    Keywords

    consumption; health; health capital; health behavior; wealth;
    All these keywords.

    JEL classification:

    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • I10 - Health, Education, and Welfare - - Health - - - General
    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • I14 - Health, Education, and Welfare - - Health - - - Health and Inequality
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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