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When Money Matters More: Long‐Term Illness and the Income/Life Satisfaction Slope
Author(s) -
Becchetti Leonardo,
Pisani Fabio
Publication year - 2021
Publication title -
review of income and wealth
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.024
H-Index - 57
eISSN - 1475-4991
pISSN - 0034-6586
DOI - 10.1111/roiw.12485
Subject(s) - economics , marginal utility , life satisfaction , term (time) , sample (material) , demographic economics , actuarial science , psychology , microeconomics , social psychology , chemistry , physics , chromatography , quantum mechanics
We compare the life satisfaction of individuals aged above 50 years reporting or not reporting long‐term illnesses. Our econometric findings show that the positive income/life satisfaction gradient is steeper for individuals with at least one long‐term illness, especially those lacking private insurance or reporting above mean unmet medical needs. We also use the compensating variation approach and show that the marginal utility of income (net of the absolute and relative income effects) for the long‐term ill is significantly larger than the average marginal utility of income in the sample.