Housing Wealth, Health and Deaths of Despair
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Housing Wealth, Health and Deaths of Despair Ariadna Jou 1
& Nuria
Mas 2 & Carles Vergara-Alert 2
Accepted: 23 October 2020/ # Springer Science+Business Media, LLC, part of Springer Nature 2020
Abstract We use household-level data to study the causal effects of exogenous changes in housing wealth on health and the drug crisis in the US attributed to “deaths of despair”. We find that a one standard deviation positive shock in housing wealth increases the probability of an improvement in self-reported health (mental health) by 1.0 (1.10) percentage points, decreases the change in drug-related mortality rate by 4.3%, and has no effect on alcoholor suicide-related deaths. The opposite effect also holds, such that a negative shock on wealth increases the probability of a decline in health. We also find that the impact of housing wealth on health varies across socioeconomic groups and is more pronounced in MSAs in which housing supply is more inelastic, which explains the differential effect of economic cycles across geographical areas. Our results suggest that housing-related policies could have important implications for general health outcomes as well as for the opioid crisis. Keywords Health . Wealth . Housing . Deaths of despair
Introduction Do housing shocks affect population health? If so, does housing wealth play a role in the US opioid crisis that has tripled the drug-related death rate since 1999?1 Although the relationship between wealth and health has been extensively reported in the literature, little is known about its causality. The attention on this relationship has been magnified by the recent dramatic increase in “deaths of despair”, that is the increase in drug overdoses and alcohol-related deaths that have shortened the lifespan of white non-Hispanic Americans for the first time after decades of progress.2 In this paper, we 1
Hedegaard et al. (2017) document that the age-adjusted rate of drug-overdose has increased from 6.1 per 100,000 in 1999 to 19.8 per 100,000 in 2016.
Case and Deaton (2015, 2017) named this crisis “deaths of despair”. They suggest that this increase has been due to difficult social and economic environments that have led to cumulative disadvantage over time.
2
* Ariadna Jou [email protected] Extended author information available on the last page of the article
A. Jou et al.
use unexpected shocks in housing wealth as an important unexplored driver that explains the effect of wealth on different measures of health such as self-reported health (SRH), limitations in activities of daily living (ADLs), drug-related mortality rates, suicide rates, and alcoholic-related liver mortality rates, as well as their socioeconomic and geographic differences. We use household-level data from the Panel Study of Income Dynamics (PSID) to exploit a quasi-natural experiment to analyze the causal relationship between wealth and health. We use the fact that housing wealth is the most important part of households wealth. It accounts for almost two thirds of the total wealth of the median ho
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