Template-Type: ReDIF-Paper 1.0 Series: Tinbergen Institute Discussion Papers Creation-Date: 2013-03-05 Number: 13-035/V Author-Name: Hans van Kippersluis Author-Workplace-Name: Erasmus University Rotterdam Author-Name: Titus J. Galama Author-Workplace-Name: University of Southern California, Dornsife College Center for Economic and Social Research & RAND Corporation, USA Title: Why the Rich drink more but smoke less: The Impact of Wealth on Health Behaviors Abstract: This discussion paper resulted in the publication 'Wealth and Health Behavior: Testing the Concept of a Health Cost' (2014). Volume 72, pages 197-220.

Wealthier individuals engage in healthier behavior. This paper seeks to explain this phenomenon by developing a theory of health behavior, and exploiting both lottery winnings and inheritances to test the theory. We distinguish between the direct monetary cost and the indirect health cost (value of health lost) of unhealthy consumption. The health cost increases with wealth and the degree of unhealthiness, leading wealthier individuals to consume more healthy and moderately unhealthy, but fewer severely unhealthy goods. The empirical evidence presented suggests that differences in health costs may indeed provide an explanation for behavioral differences, and ultimately health outcomes, between wealth groups. Classification-JEL: D91, I10, I12, I14, J24 Keywords: consumption, health, health capital, health behavior, wealth File-Url: https://papers.tinbergen.nl/13035.pdf File-Format: application/pdf File-Size: 604863 bytes Handle: RePEc:tin:wpaper:20130035