The impact of income inequality on individual and societal health: absolute income, relative income and statistical artefacts

Health Econ. 2001 Jun;10(4):357-61. doi: 10.1002/hec.613.


The relative income hypothesis, that relative income has a direct effect on individual health, has become an important part of the literature on health inequalities. This paper presents a four-quadrant diagram, which shows the effect of income, relative income and aggregation bias on individual and societal health. The model predicts that increased income inequality reduces average health regardless of whether relative income affects individual health. If relative income does have a direct effect then societal health will decrease further.

Publication types

  • Comparative Study

MeSH terms

  • Data Collection
  • Health Status*
  • Humans
  • Income / statistics & numerical data*
  • Models, Econometric
  • Nonlinear Dynamics
  • Poverty / statistics & numerical data*
  • Psychology, Social / statistics & numerical data*
  • Socioeconomic Factors
  • Spain