MethodLogical’s contributors span a wide range of disciplines, but mine might be the oddest of the bunch. What, you might wonder, does economics have to do with global health? Somewhat surprisingly, the answer is “a whole lot”, and in two distinct ways. The first, and most obvious, is that people’s economic status determines their health outcomes. But things also go the opposite direction: health governs economic success or failure, and we’re beginning to learn that the magnitude of that effect is very large.
That poverty can lead to poor health is in some sense obvious. If anti-retroviral treatment costs $1500/year, HIV patients in Malawi, where the mean income per person is $336/year (and the median even lower), are not going to get the drugs they need to survive without outside help. This basic arithmetic was one of the fundamental reasons I first got interested in development economics. However, the apparently simple link from poverty to health isn’t actually that simple: a rise in income does not always lead to the investments in healthcare that we’d expect. To take one example, many poor people around the world are malnourished, but surprisingly when they get more income even the calorie-deprived don’t appear to consume more food.
In the opposite direction there’s an emerging consensus in the economics literature that public health improvements have played a major role in the economic growth that has led millions out of poverty. On the macro scale, there is the “disease burden” hypothesis that argues that brain development is negatively impacted by childhood illness, depressing intelligence, wages and other economic indicators for a person’s entire life. Hoyt Bleakley has argued persuasively that hookworm eradication in the 1910s was responsible for income gains of as much as 50% in the American South, and a recent study has shown that the overall disease burden on a society has a significant negative impact on average IQ. But we don’t fully understand this mechanism yet. In a microempirical study, Miguel and Kremer found that a school de-worming program in Kenya significantly decreased absenteeism, but they didn’t find an effect on actual test scores.
The fact that causality runs both ways makes the link between poverty and health a fascinating and tricky issue to study. We get to use sexy statistical tricks like regression discontinuities and instrumental variables, or even the statistician’s dream of a randomized controlled trial, better known as a field experiment.
Global health turns out not just to be big-picture important for economic outcomes (and also vice versa) but also to involve some very interesting economics. I’ve hinted at some of the open questions and outright mysteries in this area, and I’ll talk about them more in future posts. I’ll also talk about my own research that touches on health, which is about how people make maybe the most important decision imaginable: whether, and how, to protect themselves from death, specifically death due to HIV.