Revisiting Health and Income Inequality Relationship: Evidence from Developing Countries

Pulok, Mohammad Habibullah
October 2012
Journal of Economic Cooperation & Development;2012, Vol. 33 Issue 4, p25
Academic Journal
In general, countries with more equal distribution of income enjoy better health. Earlier empirical studies on the relationship between income distribution and health at country level present strong evidence that income inequality on an average impedes the improvement of population health. However, a majority of these empirical studies are based on data from either only developed countries or pooled data from developing and developed countries. They mainly study the relationship at a single point of time or at an average of several years. These studies also fail to take into account the country specific unobserved heterogeneity. Departing from the general trend of the current literature, this paper examines the health-income inequality hypothesis using panel data from 31 low income and low middle income countries for the period of 1982-2002. Application of fixed effects and random effects model to control for country specific heterogeneity in this study provides contradictory findings to the existing cross country studies. In other words, empirical results of this paper confirm that there is a positive relation between health and income distribution in this set of developing countries over the study period


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