The Measurement of Health and the Connection between Health Inequality and Income

Abstract

We examine the extent to which self-reported health measures suffer from reporting bias and then characterize how this reporting bias affects the estimation of income-related health inequality as measured by the concentration index. We run a comprehensive set of tests of reporting bias using several self-reported health measures and several clinical measures of health from the National Health and Nutritional Examination Surveys. Our results confirm the existence of significant, positive, income-related reporting bias and also suggest that higher income individuals react more strongly to a change in objective, clinical health measures. We find that self-reported health measures significantly overstate the degree of income-related health inequality relative to clinical health measures. Parallel to and in support of the analysis described above, we propose the use of a multidimensional measure of clinical health in the context of measuring income-related health inequality.