Background: Common mental disorders are more prevalent in areas of high neighbourhood socioeconomic deprivation but whether the prevalence varies with neighbourhood income inequality is not known.
Aims: To investigate the hypothesis that the interaction between small-area income deprivation and income inequality was associated with individual mental health.
Method: Multilevel analysis of population data from the Welsh Health Survey, 2003/04-2010. A total of 88,623 respondents aged 18-74 years were nested within 50,587 households within 1887 lower super output areas (neighbourhoods) and 22 unitary authorities (regions), linked to the Gini coefficient (income inequality) and the per cent of households living in poverty (income deprivation). Mental health was measured using the Mental Health Inventory MHI-5 as a discrete variable and as a 'case' of common mental disorder.
Results: High neighbourhood income inequality was associated with better mental health in low-deprivation neighbourhoods after adjusting for individual and household risk factors (parameter estimate +0.70 (s.e. = 0.33), P = 0.036; odds ratio (OR) for common mental disorder case 0.92, 95% CI 0.88-0.97). Income inequality at regional level was significantly associated with poorer mental health (parameter estimate -1.35 (s.e. = 0.54), P = 0.012; OR = 1.13, 95% CI 1.04-1.22).
Conclusions: The associations between common mental disorders, income inequality and income deprivation are complex. Income inequality at neighbourhood level is less important than income deprivation as a risk factor for common mental disorders. The adverse effect of income inequality starts to operate at the larger regional level.