On the measurement of health and its effect on the measurement of health inequality

We examine the extent to which self-reported health measures suffer from income-related reporting heterogeneity and then characterize how this reporting heterogeneity affects the estimation of income-related health inequality. We run a comprehensive set of tests of reporting heterogeneity using several self-reported health measures and several clinical measures of health from the National Health and Nutritional Examination Surveys. We propose the use of a multidimensional measure using clinical indicators of health in the context of measuring income-related health inequality, and we examine the extent of income-related health inequality, as measured by the concentration index, using both self-reported measures of health and the multidimensional clinical measure. Our results confirm the existence of significant, positive, income-related reporting heterogeneity and also suggest that higher income individuals react more strongly to a change in clinical health measures. Using self-assessed health suggests that income-related health inequality is about three times larger than when using more objective, self-reported health measures and ten times larger than when using the multidimensional clinical measure of health.