Wealth and health behavior: Testing the concept of a health cost

Hans van Kippersluis*, Titus J. Galama

*Corresponding author for this work

Research output: Contribution to JournalArticleAcademicpeer-review

Abstract

Wealthier individuals engage in healthier behavior. This paper seeks to explain this phenomenon by exploiting both inheritances and lottery winnings to test a theory of health behavior. 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 partially explain behavioral differences, and ultimately health outcomes, between wealth groups.

Original languageEnglish
Pages (from-to)197-220
Number of pages24
JournalEuropean Economic Review
Volume72
DOIs
Publication statusPublished - 30 Oct 2014
Externally publishedYes

Keywords

  • Health behavior
  • Health capital
  • Unhealthy consumption
  • Wealth

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