The European Journal of Health Economics

, Volume 14, Issue 3, pp 431–442 | Cite as

Welfare-related health inequality: does the choice of measure matter?

  • Joachim R. Frick
  • Nicolas R. ZiebarthEmail author
Original Paper


Using representative microdata from the German Socio-Economic Panel Study (SOEP), we show that the welfare measure choice has a substantial impact on the degree of welfare-related health inequality. To assess the sensitivity of welfare-related health inequality measures, we combine a unique set of income and wealth measures with different subjective, cardinalized, and (quasi-)objective health measures. The influence of the welfare measure is more pronounced when using subjective health measures than when using (quasi-)objective health measures.


Welfare-related health inequality Concentration index Income measurement Wealth SOEP 

JEL Classifiaction

D31 I10 I12 



We thank the editor, two anonymous referees, Cristina Blanco, Andrew Jones, Martin Karlsson, Jenny Kragl, Tom van Ourti, and participants at seminars in Darmstadt at the “Health. Happiness. Inequality–Modelling the Pathways between Income Inequality and Health” conference, as well as in Rome at the Meeting of the Applied Econometrics Association and the “Econometrics of Healthy Human Resources.” Special thanks go to Adam Lederer for co-editing this paper.


  1. 1.
    Abul-Naga, R., Yalcin, T.: Inequality measurement for ordered response health data. J. Health Econ. 27, 1614–1625 (2008)PubMedCrossRefGoogle Scholar
  2. 2.
    Andersen, H.H., Mühlbacher, A., Nübling, M., Schupp, J., Wagner, G.G.: Computation of standard values for physical and mental health scale scores using the SOEP version of sf12v2. J. Appl. Soc. Sci. Stud. (Zeitschrift für Wirtschafts- und Sozialwissenschaften) 127, 171–182 (2007)Google Scholar
  3. 3.
    Bago d’Uva, T., O’Donnell, O., van Doorslaer, E.: Differential health reporting by education level and its impact on the measurement of health inequalities among older Europeans. Int. J. Epidemiol. 37, 1375–1383 (2008)CrossRefGoogle Scholar
  4. 4.
    Burkhauser, R.V., Feng, S., Jenkins, S.P., Larrimore, J.: Estimating trends in US income inequality using the Current Population Survey: the importance of controlling for censoring. J. Econ. Inequal. 9, 393–415 (2011)CrossRefGoogle Scholar
  5. 5.
    Danish Ministry of Health [Sundhedsministeriet]: The Government’s Public Health Programme 1999–2008 [Regeringens folkesundhedsprogram 1999–2008]. Danish Ministry of Health, Copenhagen (1999)Google Scholar
  6. 6.
    Erreygers, G.: Correcting the concentration index. J. Health Econ. 28, 504–515 (2009)PubMedCrossRefGoogle Scholar
  7. 7.
    Erreygers, G.: Correcting the concentration index: a reply to Wagstaff. J. Health Econ. 28, 521–524 (2009)CrossRefGoogle Scholar
  8. 8.
    Erreygers, G., van Ourti, T.: Putting the cart before the horse. A comment on Wagstaff on inequality measurement in the presence of binary variables. Health Econ. 20, 1161–1165 (2011)PubMedCrossRefGoogle Scholar
  9. 9.
    Erreygers, G., van Ourti, T.: Measuring socioeconomic inequality in health, health care, and health financing by means of rank-dependent indices: a recipe for good practice. J. Health Econ. 30, 685–694 (2011)PubMedCrossRefGoogle Scholar
  10. 10.
    Frick, J.R., Grabka, M.M., Sierminska, E.M.: Representative wealth data for Germany from the German SOEP: the impact of methodological decisions around imputation and the choice of the aggregation unit. SOEPpapers 3, DIW Berlin, The German Socio-Economic Panel (2007a). Available at: Last accessed on February 2, 2012
  11. 11.
    Frick, J.R., Grabka, M.M., Marcus, J.: Editing and multiple imputation of item-non-response in the 2002 wealth module of the German Socio-Economic Panel (SOEP). Data Documentation 18, DIW Berlin, German Institute for Economic Research (2007b). Available at: Last accessed on February 2, 2012
  12. 12.
    Gakidou, E.E., Murray, C.J.L., Frenk, J.: Defining and measuring health inequality: an approach based on the distribution of health expectancy. Bull. World Health Organ. 78, 42–54 (2000)PubMedGoogle Scholar
  13. 13.
    Hank, K., Jürges, H., Schupp, J., Wagner, G.G.: Isometrische Greifkraft und sozialgerontologische Forschung: Ergebnisse und Analysepotentiale des SHARE und SOEP. Zeitschrift für Gerontologie und Geriatrie 42, 117–126 (2009)PubMedCrossRefGoogle Scholar
  14. 14.
    House of Commons Health Committee: Health Inequalities: Third Report of Session 2008–2009. HMSO, London (2009)Google Scholar
  15. 15.
    Jones, A.M., Rice, N., d’Uva, T.B., Balia, S.: Applied Health Economics. Routledge, Abington (2007)Google Scholar
  16. 16.
    Jürges, H.: True health vs. response styles: exploring cross-country differences in self-reported health. Health Econ. 16, 163–178 (2007)PubMedCrossRefGoogle Scholar
  17. 17.
    Jürges, H.: Health inequalities by education, income and wealth: a comparison of 11 European countries and the US. Appl. Econ. Lett. 17, 91–97 (2010)Google Scholar
  18. 18.
    Kakwani, N., Wagstaff, A., van Doorslaer, E.: Socioeconomic inequalities in health: measurement, computation, and statistical inference. J. Econ. 77, 87–103 (1997)Google Scholar
  19. 19.
    Lecluyse, A.: Income-related health inequality in Belgium: a longitudinal perspective. Eur. J. Health Econ. 8, 237–243 (2007)PubMedCrossRefGoogle Scholar
  20. 20.
    Le Grand, J.: Inequality in health: some international comparisons. Eur. Econ. Rev. 31, 182–191 (1987)CrossRefGoogle Scholar
  21. 21.
    Lindelow, M.: Sometimes more equal than others: how health inequalities depend on the choice of welfare indicator. Health Econ. 15, 263–279 (2006)PubMedCrossRefGoogle Scholar
  22. 22.
    McGee, D.L., Liao, Y., Cao, G., Cooper, R.S.: Self-reported health status and mortality in a multiethnic US cohort. Am. J. Epidemiol. 149, 41–46 (1999)PubMedCrossRefGoogle Scholar
  23. 23.
    O’Donnell, O., van Doorslaer, E., Wagstaff, A., Lindelow, M.: Analyzing Health Equity Using Household Survey Data: A Guide to Techniques and their Implementation. D.C., World Bank Publications, Washington (2007)CrossRefGoogle Scholar
  24. 24.
    Hays, R.D., Sherbourne, C.D, Mazel, R., RAND: User’s Manual for the Medical Outcomes Study (MOS) Core Measures of Health-Related Quality of Life. RAND Monograph Report, Santa Monica, RAND Corporation (1995). Available at: Last accessed on February 2, 2012
  25. 25.
    Rantanen, T., Guralnik, J.M., Foley, D., Masaki, K., Leveille, S., Curb, J.D., White, L.: Midlife hand grip strength as a predictor of old age disability. J. Am. Med. Assoc. 281, 558–560 (1999)CrossRefGoogle Scholar
  26. 26.
    Rantanen, T., Harris, T., Leveille, S.G., Visser, M., Foley, D., Masaki, K., Guralnik, J.M.: Muscle strength and body mass index as long-term predictors or mortality in initially healthy men. J. Gerontol. Med. Sci. 55A, M168–M173 (2000)CrossRefGoogle Scholar
  27. 27.
    Schmitz, H.: Why are the unemployed in worse health? The causal effect of unemployment on health. Labour Econ. 18, 71–78 (2011)CrossRefGoogle Scholar
  28. 28.
    Schneider, U., Pfarr, C., Schneider, B.S., Ulrich, V.: I feel good! Gender differences and reporting heterogeneity in self-assessed health. Eur. J. Health Econ. (2012). doi:  10.1007/s10198-011-0301-7
  29. 29.
    Sturm, R.: The effects of obesity, smoking, and drinking on medical problems and costs. Health Aff. 21, 245–253 (2002)CrossRefGoogle Scholar
  30. 30.
    Tubeuf, S., Jusot, F.: Social health inequalities among older Europeans: the contribution of social and family background. Eur. J. Health Econ. 12, 61–77 (2011)PubMedCrossRefGoogle Scholar
  31. 31.
    Wagner, G.G., Frick, J.R., Schupp, J.: The German Socio-Economic Panel Study (SOEP)–evolution, scope and enhancements. J. Appl. Soc. Sci. Stud. (Schmollers Jahrbuch) 127, 139–169 (2007)Google Scholar
  32. 32.
    Wagstaff, A.: The bounds of the Concentration Index when the variable of interest is binary, with an application to immunization inequality. Health Econ. 14, 429–432 (2005)PubMedCrossRefGoogle Scholar
  33. 33.
    Wagstaff, A.: The bounds of the Concentration Index when the variable of interest is binary, with an application to immunization inequality. J. Health Econ. 28, 516–520 (2009)PubMedCrossRefGoogle Scholar
  34. 34.
    Wagstaff, A.: The Concentration Index of a binary outcome revisited. Health Econ. 20, 1155–1160 (2011)PubMedCrossRefGoogle Scholar
  35. 35.
    Wagstaff, A.: Reply to Guido Erreygers and Tom van Ourti’s comment on “The Concentration Index of a binary outcome revisited”. Health Econ. 20, 1166–1168 (2011)PubMedCrossRefGoogle Scholar
  36. 36.
    Wagstaff, A., Wantanabe, N.: What difference does the choice of SES make in health inequality measurement? Health Econ. 12, 885–890 (2003)PubMedCrossRefGoogle Scholar
  37. 37.
    Wolff, E.N., Zacharias, A.: Household wealth and the measurement of economic well-being in the United States. J. Econ. Inequal. 7, 83–115 (2009)CrossRefGoogle Scholar
  38. 38.
    World Health Organization (WHO): The World Health Report 2000-Health Systems: Improving Performance. World Health Organization (WHO), Geneva (2000)Google Scholar
  39. 39.
    van Doorslaer, E., Jones, A.M.: Inequalities in self-reported health: validation of a new approach to measurement. J. Health Econ. 22, 61–87 (2003)PubMedCrossRefGoogle Scholar
  40. 40.
    Zheng, B.: A new approach to measure socioeconomic inequality in health. J. Econ. Inequal. 9, 555–577 (2011)CrossRefGoogle Scholar
  41. 41.
    Zhong, H.: The impact of missing data in the estimation of concentration index: a potential source of bias. Eur. J. Health Econ. 11, 255–266 (2010)PubMedCrossRefGoogle Scholar
  42. 42.
    Ziebarth, N.R.: Measurement of health, health inequality, and reporting heterogeneity. Soc. Sci. Med. 71, 116–124 (2010)PubMedCrossRefGoogle Scholar

Copyright information

© Springer-Verlag 2012

Authors and Affiliations

  1. 1.DIW Berlin, Socio-Economic Panel Study (SOEP)Berlin Institute of Technology (TU Berlin)BerlinGermany
  2. 2.Policy Analysis and Management (PAM)Cornell UniversityIthacaUSA
  3. 3.DIW BerlinBerlinGermany
  4. 4.IZABonnGermany

Personalised recommendations