Does Income Inequality Affect Health Status?

The main question that is addressed in the article “Income inequality and health status: role of institutions quality” written by Alassane Drabo is ‘Does the impact of income inequality on health status change when the quality of health institution varies?’. Specifically, will the increase or decrease in quality of a health institution such as as a hospital increase or decrease the impact of income inequalities on the health status of an area. Although this answer may be obvious, this question needs to be answered using empirical data which is provided in this paper. There is a lot of policy relevance that circles this question because although the main focus is to find weather or not income inequalities affect health status, it is important
to implement policies that can enhance health institutions overall. To estimate the impacts of institution quality on health status, the study uses ten studies that use cross - sectional data. Out of the ten studies, eight studies are used to produce eleven new estimates (Drabo, 2010, pg.2536). The study also used data that ranged from the year 1975 to the year 2000 which took into account data for 91 different developed and developing countries(Drabo, 2010, pg.2536). To measure income inequality, the study uses the Gini coefficient and in this study specifically, the Estimated Household Income Inequality index is used and has a range between 0 - 1(Drabo, 2010, pg.2536). Investment profile, political liberties and civil rights are used to represent the institutions variable. The three explanatory variables that this study uses is Gross Domestic Product per capita, population density, and fertility rate(Drabo, 2010, pg.2536). The main result that was found in this study is that income inequality negatively affects population health(Drabo, 2010, pg.2536). The empirical research in the study also found that the negative effect that income inequalities bring on health status are mitigated by the good institutions(Drabo, 2010, pg.2536). Another main result that was discussed in the study is that income inequalities affects higher health status in developing countries, which is plausible because developing countries gain more health from a decrease in income inequality then developed countries do. Considering that the study found that income inequalities man the overall health worse, on policy implication that could be implemented is to offer incentives for medical staff to come to the areas where institutions are lower and in turn increase the overall institution quality over time. Another great policy that could be implemented to decrease income inequality is that countries with higher incomes could implement a distributive policy so that the countries with lower incomes may increase overall health status(Drabo, 2010, pg.2536). A very important internal weakness to the paper to address is that when the estimations occur, many variables are accounted for but there are also variables that may be relevant but are not stated. This causes an over-estimation of the dependent variable. Since the study used was conducted between 1975 and 2000, the estimations may be very different than if current data was used. This is a major external weakness because the study is outdated. An external strength of this study is that 91 different developed and developing countries were used in this study which covers a large fraction of the worlds countries. Accordingly, because of the fact that a large geographic space is covered, we could agree that the data collected from these countries is relevant and covers a large demographic of the population. The impact of income inequalities on health status has been in discussion for many years and is continuing to be a very crucial and important topic to study.
Although the answer may seem simple, there are many external variables that can affect the outcomes of this question. In this paper the main questions that were asked are ‘Does income inequality have an effect on overall health status of an area/individual?’ and ‘Are there other factors that may affect levels of income that in turn affect health status?’. Every article that was used in this study came to the same overall conclusion but the approach was really different. The first article looked at the impact of income inequality on health status in low to middle class areas. The second article looked at the impact of income inequalities in a more developed region which is North America. Finally, the third article studied if the impact of income inequalities on health status changed when the quality of health institutions was taken into account. Although every method and study within these three articles were different there were some repetitive variables such as the Gini coefficient that was used in all three studies. Accordingly, every article answered the same general question. All of the articles specified that income inequalities are negatively correlated with health status. To simplify, areas with lower income patterns tended to have a lower health status then the areas with a lot of income. Considering that the sample size across all three studies was quite large, we can conclude that the result is non-bias and significant. To answer the secondary question ‘Are there other factors that may affect levels of income that in turn affect health status?’, the second and third article was used. One of the articles concluded that the impact on health status is not restricted by income inequalities. Other variables that can alter the impacts on health status are GDP/capita within a country and the level of
education as well as the quality of the physicians that work in the medical institutions. The article that ran the study in North America concluded that medical insurance had an impact had a larger impact on the life expectancy of males aged 45 - 65 then on males aged 65 and over. Accordingly, we can conclude that yes, there are many other variables that can impact health status and they need to be accounted for when the regressions are conducted. Although many studies have been done to conclude that income inequalities have an impact on health status, there are many more changes that can be made to better these studies and to increase the overall health worldwide. Although income was a large factor in these studies, something to look at for future research would be the mortality rates in countries and the causes of those deaths. This would help us better understand why lower incomes lead to lower health and would lead us to the root cause. This is really important to study because we may realize that it is more important to focus on eliminating the root cause as opposed to increasing incomes. With the expansion of the renewable resource market, another great addition for future research would be to implement that market in countries that experience trends of lower income and create more job opportunities. If more job opportunities are created, we would be able to truly see if incomes impact the quality of health but the only way to do that is to generate more income in countries that currently have less.