Abstract
This study evaluates the direct causal effects of household wealth on health. We discuss several specific mechanisms that that could relate poverty with worse health and hypothesize that poverty will undermine population health. This hypothesis was tested based on data drawn from a recent cross-country survey in 12 post-Soviet countries and Mongolia using classic regression (OLS) and instrumental variable 2SLS regressions. The results indicate that poverty does indeed lead to worsening health. This negative effect of poverty on health remains unchanged after controlling for a wide range of individual characteristics, healthcare performance indicators, trust in individuals, government, parliament, and political parties, as well as country-level unobserved characteristics. Using an instrumental variable increases our confidence in being able to isolate the effects of poverty on health status and confirms that our results are not due to endogeneity. In addition, the strong negative effect of poverty on health remains robust to the use of a set of country-level aggregated indicators (e.g. GDP and Gini) instead of country dummies, the employment of a subjective self-assessment indicator of poverty instead of an objective one, and an alternative conceptualization of health status as a binomial variable (for bad and very bad health) instead of a continuous one.
Highlights
At the center of the debate about the social determinants of health has been the issue of the effect of wealth on the health status of individuals
The results suggest that lower household expenditures lead to a significant reduction in health status (β = 0.218; p-value = 0.000)
The current study has focused on evaluating the direct causal effects of poverty on health status in the countries of the former Soviet Union and Mongolia
Summary
At the center of the debate about the social determinants of health has been the issue of the effect of wealth on the health status of individuals. Of specific concern has been the question of the extent to which individuals from poorer households are less healthy than individuals from wealthier households [1,2,3]. Grossman (1972) [4] suggested early on that income has a positive effect on health since increases in wages are associated with improvements in health status, and more recent studies have concurred by reporting that individuals who reside in poorer households tend to be less healthy due to lack of resources and psychosocial stress [5,6,7,8]. A final possibility is that there may be a relationship between poverty and health, it may either not be statistically significant or not significant enough in magnitude to affect policy [18,19,20]
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