Poor and Sick: Estimating the relationship between Household Income and Health

This study evaluates the effect of the individual‘s household income on their health at the later stages of working life. A structural equation model is utilised in order to derive a composite and continuous index of the latent health status from qualitative health status indicators. The endogenous relationship between health status and household income status is taken into account by using IV estimators. The findings reveal a significant effect of individual household income on health before and after endogeneity is taken into account and after a host of other factors which is known to influence health, including hereditary factors and the individual‘s locus of control. Importantly, it is also shown that the childhood socioeconomic position of the individual has long lasting effects on health as it appears to play a significant role in determining health during the later stages of working life.

Can Early Intervention Policies Improve Well-being? Evidence from a randomized controlled trial

Many authors have proposed incorporating measures of well-being into evaluations of public policy. Yet few evaluations use experimental design or examine multiple aspects of well-being, thus the causal impact of public policies on well-being is largely unknown. In this paper we examine the effect of an intensive early intervention program on maternal well-being in a targeted disadvantaged community. Using a randomized controlled trial design we estimate and compare treatment effects on global well-being using measures of life satisfaction, experienced well-being using both the Day Reconstruction Method (DRM) and a measure of mood yesterday, and also a standardized measure of parenting stress. The intervention has no significant impact on negative measures of well-being, such as experienced negative affect as measured by the DRM and global measures of well-being such as life satisfaction or a global measure of parenting stress. Significant treatment effects are observed on experienced measures of positive affect using the DRM, and a measure of mood yesterday. The DRM treatment effects are primarily concentrated during times spent without the target child which may reflect the increased effort and burden associated with additional parental investment. Our findings suggest that a maternal-focused intervention may produce meaningful improvements in experienced well-being. Incorporating measures of experienced affect may thus alter cost-benefit calculations for public policies.

Choice, Deferral and Consistency

In this paper we study decision making in situations where the individual’s preferences are not assumed to be complete. First, we identify conditions that are necessary and sufficient for choice behavior in general domains to be consistent with maximization of a possibly incomplete preference relation. In this model of maximally dominant choice, the agent defers/avoids choosing at those and only those menus where a most preferred option does not exist. This allows for simple explanations of conflict-induced deferral and choice overload. It also suggests a criterion for distinguishing between indifference and incomparability based on observable data. A simple extension of this model also incorporates decision costs and provides a theoretical framework that is compatible with the experimental design that we propose to elicit possibly incomplete preferences in the lab. The design builds on the introduction of monetary costs that induce choice of a most preferred feasible option if one exists and deferral otherwise. Based on this design we found evidence suggesting that a quarter of the subjects in our study had incomplete preferences, and that these made significantly more consistent choices than a group of subjects who were forced to choose. The latter effect, however, is mitigated once data on indifferences are accounted for.