Given study is about the curvi-linear relationship between economic income & health status of an individual

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The relation between health and income is such that there is health improvement when average income improves but it is at a decreasing rate which indicates a curvi-linear relationship between the two. According to Wilkinson hypothesis which is based on relative income health depends on the income inequality in the society. The more the average income is distributed the standard of health (Jen, Jones and Johnston, 2009 ) The Health of individuals have not been found to be equal there are many factors that determine we examine here the effect of income on the health of the individuals. Health is also dependant on the daily living activities of the person concerned and also the instrumental activities of daily living. For the purpose of healthy living prevention is better than cure individuals  visit  health professional for the purpose, watch their diet, do physical exercise and due to habits of smoking or drinking. A number of hypotheses have been identified to explain the relation between health and income inequality such as the relative income hypothesis, the deprivation hypothesis the relative position hypothesis (Allanson and Petrie, 2013).. The individual level studies can help understand the difference between the various hypotheses such as absolute income hypothesis and the different versions of relative income hypothesis. Researchers have shown the relation between income and health is negative. The lack of material resources can result in weaker health and lower income people will have lesser health according to the materialist hypothesis. Material factors can determine the social status which can influence the health which is experienced due to residence, workplace and exposure to atmospheric pollution (Herzer and Nunnenkamp, 2015).. We test the hypothesis that health is dependent on the income or the health inequalities can be explained by the income inequalities using the British Household Panel Survey.


  Health is a dynamic component and it can come from a variety of sources. Individuals may invest in health which can determined by their habit of visiting health professions for preventive care or the changes they make in their diets or the methods of exercise regimen and giving up of smoking or drinking or eating . These investments may or may not result in a better health status as these are adopted in many cases due to some health issues faced by the individual and hence there is uncertainty   involved. Age is another factor which determines earth as natural aging is bound to result is lesser health as some of the chronic conditions may aggravate. Persons may be subject to health shocks such as catching an infectious disease etc Jones, A.M. and Wildman, J., 2008.  Since a single measure does not have the likelihood of capturing these components there is a need to use different measures for assessment in the empirical method. 

For a given individual self reported health measures have been widely used and this has been questioned as the personal evaluation of one's health is subjective (Hildebrand and Van Kerm, 2009).

The international relation between Gross National Income per capita and the health  represented by the proxy life expectancy  is weaker for the richer countries with progress showing weakness as the countries get reached and it is zero for the richest. According to Wilkinson 2006 health is dependent on how the income is distributed provided this distribution of income determines the scale with which the social class is determined (Kondo et.al. 2009) 

Income inequality has the effect of reducing health as the difference in income as well as other visible differences among individuals. This leads to difficulties in establishing friendships and increases comparison and there is competition for status and all these lead to stress and affects the well being of the people resulting in their poor health. Besides the income there are many confounders or mediators and several variables are included in the analysis most prominent among them being the demographic variables ( Gunasekara,Carter and Blakely,2011).

Among the lower income level of the population the investment in education is found to be lesser.

The level of education is a factor which affects the health status as the level of education is expected to create more awareness regarding food practices, diets, sanitation and risks involved in indulging in smoking and drinking (Allanson, Gerdtham and Petrie,2010). Therefore educated people are expected to take much more preventive measures and care and thus better health is expected to be achieved. The opportunity cost of getting sick is high and the educated people are able to assess this more better.AS per theory better educations should result in better health

Age is another factor which determines .In the early year’s health is expected to improve and with further ageing health will deteriorate. According to the life course theory which explains the causes of health inequalities, it is proposed that the health inequalities can be attributed partly due to the accumulation of effects caused by the exposure of the individuals to hazards such as in employment, environment, poor housing and risky behaviours such as smoking, drug and alcohol abuse (Gravelle and Sutton,2009). A longer exposure to the hazards would cause a greater health inequality or change in health status but these have not been found to change monotonically with age. Health changes occur with the age due to natural causes and the fact that social position may not influence uniformly the health of persons of the same age (Karlsson et.al.2010)

Health risky behavior such as smoking results in poorer health status. One should also consider the female smokers who can pass on diseases during pregnancy to their child which can result in poorer health status in the society. Donne et al found that employment has an effect on ill health by operating through the income inequality but the magnitude of which is unknown. WHO has posited that people’s health is influenced by income and social status, literacy and level of education, food availability, genetics gender and culture and many other factors (WHO 2003)? Economic viability and educational level determine the living environment which can determine the health status (Bamboos et al 2005). In developing countries income inequality and the health of the public are considered as a problem to be solved by establishing proper health care facilities and by increasing the income level of the people. 

Methodology and data

The BHPS is a longitudinal survey where households in Great Britain are surveyed. The survey is repeated in the same households after a year and these data are presented as wave data. First year being wave1 and then wave2 etc. In this we use the wave 6 data for analysing our hypothesis (Contoyannis,Jones and Rice, 2004). Information is available on both individual and household level and includes questions which can provide detail on the income, job, health, demographics, their behaviours and opinions on various matters .Logistic regression is used to predict a categorical (usually dichotomous) variable from a set of predictor variables.   The model uses the multinomial logistic regression technique where the dependant variable individual health status is studied using the explanatory variables X which include income and other explanatory variables which act as   factors (Van Ourti, Van Doorslaer and Koolman, 2009).. 

The econometric model equation is 


  H=β_1+ β_2 Ln(income+β_3 Age+β_4 ?Age?^2+β_5 Gender+β_6 Marital status+β_(7 ) sociostatus+β_8 education+β_9 Smoking 


Health Status

The BHPS survey uses several questions which are considered with health which have to be answered by the individual himself. The general health of the individual is taken from the self assessment of the individual about his health. The responses to these have been excellent, very good, fair, and poor and thus they have been recorded into a categorical variable. The dependant variable is an ordered categorical variable where the general health is self assessed and has five categories ranging 1 excellent to 5.0 poor. 


The total household income is a derived variable in the BHPS data set which is from the sum of all income including from wages and investments for the past twelve months. This is the gross income but the net income can provide a better reflection of the economic status as it represents the net disposable income can provide information about the purchasing power of the individual.

To test the absolute income hypothesis income is included in logarithmic form. Even though the expectation of the relation between income and health is non linear it may not be concave due to the limitation of the nonlinearity being to the degree of log transformation 

 Other Explanatory variables

Age, gender, marital status, ethnicity, education, smoking status and socioeconomic group are included as explanatory variables.Age is an explanatory variable as initially health is expected to improve with age and deteriorate at a later stage in life.Thus the relationship is non linear and hence the square of the age is included and the beta parameter in this case will be negative. Gender is represented by male =0 and female by 1. An interaction between gender and age is also analysed subsequently so that after child bearing the health rating by the females will be different than that before. Marital status consists of four variables, married, widowed, divorced and never married. Married is the reference case and is the excluded category in the regression equation. Education is the highest education educational qualification with no qualification and others being categorised into five categories Degree, higher degree, a level, GCSE and other qualification Socio economic group in the BHPS survey is a derived variable with the group being formed based on their occupation. Where not applicable is considered as unemployed and is the excluded category. Variables represent professionals, managers, skilled manual and non manual, partly skilled, unskilled, armed forces. Smoking is a factor which can be considered as a risky behaviour and this has been found to create need for health care with continued exposure and thereby will be dependant on the income. Besides females who smoke can create health problems.

Results and analysis

The dataset available for analyse was filtered for accounting for missing values and values which are not useful in our analysis. These includes the responses such as Missing, Donor know, Proxy, refused information etc. This has been done to eliminate bias so that only the record which has valid responses for all the variables chosen is taken. For the net income we have taken 0 also since this could either mean no job as we have not accounted for the factor whether he is employed or not this is to be considered as an indicator. The negative values in personal net income has also been not considered (Herzer and Nunnenkamp,2015).


The health status of the individual which is self declared in the BHPS is used as the dependant variable to test the hypothesis to test the relationship between health and income. Though studies have predicted that income has a role in determining the health status because of the fact that it can influence several confounding factors which determine the health such as education, social status, risky behaviours etc these variables are also considered along with income to make a predictor model. The model is found to be significant but the coefficients of income are found to be non significant in cases of good health where as it is significant for a fair health. The study is a static one and needs to be done on a dynamic with the time factor also to understand the significance of the model better.

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