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,

consumption, health, health behavior, health capital, wealth
Intertemporal Consumer Choice; Life Cycle Models and Saving (jel D91), Health: General (jel I10), Health Production: Nutrition, Mortality, Morbidity, Substance Abuse and Addiction, Disability, and Economic Behavior (jel I12), Human Capital; Skills; Occupational Choice; Labor Productivity (jel J24)
Tinbergen Institute
hdl.handle.net/1765/39185
Tinbergen Institute Discussion Paper Series
Discussion paper / Tinbergen Institute
Erasmus School of Economics

van Kippersluis, J.L.W, & Galama, T.J. (2013). Why the Rich drink More but smoke Less: The Impact of Wealth on Health Behaviors (No. TI 13-035/V). Discussion paper / Tinbergen Institute (pp. 1–53). Tinbergen Institute. Retrieved from http://hdl.handle.net/1765/39185