The effect of objective income and perceived economic resources on self-rated health

Several studies have demonstrated that self-rated health status is affected by socioeconomic variables. However, there is little knowledge about whether perceived economic resources affect people's health. The purpose of this study is to examine the relationship between self-rated health status and different measures of income. Specifically, the effect of both objective income and perceived economic resources are estimated for a very large sample of households in Italy. By estimating this relationship, this paper aims at filling the previously mentioned gap.

The data used are from the 2015 European Health Interview Survey and were collected using information from approximately 16,000 households in 562 Italian municipalities. Ordinary and generalized ordered probit models were used in estimating the effects of a set of covariates, among others measures of income, on the self-rated health status.

The results suggest that the subjective income, measured by the perceived economic resources, affects the probability of reporting a higher self-rate health status more than objective income. The results also indicate that other variables, such as age, educational level, presence/absence of chronic disease, and employment status, affect self-rated health more significantly than objective income. It is also found that males report more frequently higher rating than females.

Our analysis demonstrates that perceived income affects significantly self-rated health. While self-perceived economic resources have been used to assess economic well-being and satisfaction, they can also be used to assess stress levels and related health outcomes. Our findings suggest that low subjective income adversely affects subjective health. Therefore, it is important to distinguish between effects of income and individuals' perceptions of their economic resources or overall financial situation on their health. From a gender perspective, our results show that females are less likely to have high rating than males. However, as females perceive an improved economic situation, on the margin, the likelihood of a higher self-rated health increases compared to males.