Indonesia | Economics

Sunday, January 06, 2008

Does poverty kill?

A recent NBER paper by Abhijit Banerjee and Esther Duflo:
This paper uses household survey data form several developing countries to investigate whether the poor (defined as those living under $1 or $2 dollars a day at PPP) and the non poor have different mortality rates in old age. We construct a proxy measure of longevity, which is the probability that an adult's mother and father are alive. The non-poor's mothers are more likely to be alive than the poor's mothers. Using panel data set for Indonesia and Vietnam, we also find that older adults are significantly more likely to have died five years later if they are poor. The direction of causality is unclear: the poor may be poor because they are sick (and thus more likely to die), or they could die because they are poor.

For Indonesia, they find that:
[In] all age groups, there is very little difference in death rates between the poor and the extremely poor, but the non-poor are less likely to die than the poor and the extremely poor. This is true both five years out and ten years out, and in both rural and urban areas. In rural areas, depending on the age group and whether we look at five to ten years out, the extremely poor are 1.4 to 5 times more likely to die than those who live between $6 and $10 dollars a day. (p. 14)

They find a similar pattern in the Vietnam data. Though they have not established the direction of causality between poverty and longevity, "[on] balance, we are tempted to interpret the evidence accumulated in this paper as revealing, at least in part, that poverty does kill."

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