Health and Wealth of Elderly Couples: Causality Tests Using Dynamic Panel Data Models

P.C. Michaud, A.H.O. van Soest

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Abstract

A positive relationship between socio-economic status (SES) and health, the so-called \health-wealth gradient", is repeatedly found in most industrialized countries with similar levels of health care technology and economic welfare. This study analyzes causality from health to wealth (health causation) and from wealth to health (wealth or social causation) for elderly couples in the US. Using six biennial waves of couples aged 51-61 in 1992 from the Health and Retirement Study, we compare the recently developed strategy using Granger causality tests of Adams et al.(2003, Journal of Econometrics) with tests for causality in dynamic panel data models incorporating unobserved heterogeneity. While Adams et al. tests reject the hypothesis of no causality from wealth to husband's or wife's health, the tests in the dynamic panel data model do not provide evidence of wealth-health causality.On the other hand, both methodologies lead to strong evidence of causal e®ects from both spouses' health on household wealth.
Original languageEnglish
Place of PublicationTilburg
PublisherEconometrics
Number of pages49
Volume2004-81
Publication statusPublished - 2004

Publication series

NameCentER Discussion Paper
Volume2004-81

Fingerprint

Dynamic panel data model
Wealth
Health
Causality test
Causality
Unobserved heterogeneity
Granger causality test
Household wealth
Spouses
Healthcare
Econometrics
Causation
Gradient
Methodology
Social causation
Economic welfare
Health and Retirement Study
Socioeconomic status
Developed countries

Keywords

  • health
  • wealth
  • panel data
  • inequality
  • ageing

Cite this

Michaud, P. C., & van Soest, A. H. O. (2004). Health and Wealth of Elderly Couples: Causality Tests Using Dynamic Panel Data Models. (CentER Discussion Paper; Vol. 2004-81). Tilburg: Econometrics.
Michaud, P.C. ; van Soest, A.H.O. / Health and Wealth of Elderly Couples : Causality Tests Using Dynamic Panel Data Models. Tilburg : Econometrics, 2004. (CentER Discussion Paper).
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abstract = "A positive relationship between socio-economic status (SES) and health, the so-called \health-wealth gradient{"}, is repeatedly found in most industrialized countries with similar levels of health care technology and economic welfare. This study analyzes causality from health to wealth (health causation) and from wealth to health (wealth or social causation) for elderly couples in the US. Using six biennial waves of couples aged 51-61 in 1992 from the Health and Retirement Study, we compare the recently developed strategy using Granger causality tests of Adams et al.(2003, Journal of Econometrics) with tests for causality in dynamic panel data models incorporating unobserved heterogeneity. While Adams et al. tests reject the hypothesis of no causality from wealth to husband's or wife's health, the tests in the dynamic panel data model do not provide evidence of wealth-health causality.On the other hand, both methodologies lead to strong evidence of causal e{\circledR}ects from both spouses' health on household wealth.",
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Michaud, PC & van Soest, AHO 2004 'Health and Wealth of Elderly Couples: Causality Tests Using Dynamic Panel Data Models' CentER Discussion Paper, vol. 2004-81, Econometrics, Tilburg.

Health and Wealth of Elderly Couples : Causality Tests Using Dynamic Panel Data Models. / Michaud, P.C.; van Soest, A.H.O.

Tilburg : Econometrics, 2004. (CentER Discussion Paper; Vol. 2004-81).

Research output: Working paperDiscussion paperOther research output

TY - UNPB

T1 - Health and Wealth of Elderly Couples

T2 - Causality Tests Using Dynamic Panel Data Models

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AU - van Soest, A.H.O.

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N2 - A positive relationship between socio-economic status (SES) and health, the so-called \health-wealth gradient", is repeatedly found in most industrialized countries with similar levels of health care technology and economic welfare. This study analyzes causality from health to wealth (health causation) and from wealth to health (wealth or social causation) for elderly couples in the US. Using six biennial waves of couples aged 51-61 in 1992 from the Health and Retirement Study, we compare the recently developed strategy using Granger causality tests of Adams et al.(2003, Journal of Econometrics) with tests for causality in dynamic panel data models incorporating unobserved heterogeneity. While Adams et al. tests reject the hypothesis of no causality from wealth to husband's or wife's health, the tests in the dynamic panel data model do not provide evidence of wealth-health causality.On the other hand, both methodologies lead to strong evidence of causal e®ects from both spouses' health on household wealth.

AB - A positive relationship between socio-economic status (SES) and health, the so-called \health-wealth gradient", is repeatedly found in most industrialized countries with similar levels of health care technology and economic welfare. This study analyzes causality from health to wealth (health causation) and from wealth to health (wealth or social causation) for elderly couples in the US. Using six biennial waves of couples aged 51-61 in 1992 from the Health and Retirement Study, we compare the recently developed strategy using Granger causality tests of Adams et al.(2003, Journal of Econometrics) with tests for causality in dynamic panel data models incorporating unobserved heterogeneity. While Adams et al. tests reject the hypothesis of no causality from wealth to husband's or wife's health, the tests in the dynamic panel data model do not provide evidence of wealth-health causality.On the other hand, both methodologies lead to strong evidence of causal e®ects from both spouses' health on household wealth.

KW - health

KW - wealth

KW - panel data

KW - inequality

KW - ageing

M3 - Discussion paper

VL - 2004-81

T3 - CentER Discussion Paper

BT - Health and Wealth of Elderly Couples

PB - Econometrics

CY - Tilburg

ER -

Michaud PC, van Soest AHO. Health and Wealth of Elderly Couples: Causality Tests Using Dynamic Panel Data Models. Tilburg: Econometrics. 2004. (CentER Discussion Paper).