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The link between health and economic preferences: Evidence from 22 OECD countries
Author(s) -
Cen Xi,
Johnston David W.,
Kung Claryn S. J.,
Shields Michael A.,
Sun Eric C.
Publication year - 2021
Publication title -
health economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.55
H-Index - 109
eISSN - 1099-1050
pISSN - 1057-9230
DOI - 10.1002/hec.4225
Subject(s) - demographic economics , gross domestic product , limiting , inequality , economics , mental health , survey data collection , development economics , environmental health , public economics , economic growth , psychology , medicine , mechanical engineering , mathematical analysis , statistics , mathematics , engineering , psychotherapist
Abstract We study the link between health status and economic preferences using survey data from 22 Organisation for Economic Co‐operation and Development (OECD) countries. We hypothesize that there is a relationship between poor health and the preferences that people hold, and therefore their choices and decisions. We find that individuals with a limiting health condition are more risk averse and less patient, and that this is true for physical and mental health conditions. The magnitudes of the health gap are approximately 60% and 70% of the gender gap in risk and time preferences, respectively. Importantly, the health gaps are large for males, females, young, old, school dropouts, degree holders, employed, nonemployed, rich, and poor. They also hold for countries with different levels of gross domestic product (GDP), inequality, social expenditure, and disease burden.