Comparing indices of relative deprivation using behavioural evidence

Hilda Osafo Hounkpatin, Alex M. Wood, Gordon D.A. Brown

Research output: Contribution to journalComment/debatepeer-review

3 Citations (Scopus)

Abstract

What measure of relative deprivation best predicts health? While numerous indices of relative deprivation exist, few studies have compared how well different measures account for empirical data. Hounkpatin et al. (2016) demonstrated that the relative ranked position of an individual i's income within a comparison group (their relative rank) was a better predictor of i's health than i's relative deprivation as assessed by the widely-used Yitzhaki index. In their commentary, Stark and Jakubek (2020) argue that both relative rank and relative deprivation may matter, and they develop a composite index. Here we identify some issues with their composite index, develop an alternative based on behavioural evidence, and test the various indices against data. Although almost all existing indices assume that the significance of an income yj to an individual with income yi (yj>yi) will be some increasing function of the difference between yj and yi, we find that the influence of j's income on i's health is actually a reducing function of (yj−yi). This finding — that less significance is assigned to distant higher incomes than to near higher incomes — is consistent with the well-established idea that we compare ourselves primarily to similar others.

Original languageEnglish
Article number112914
JournalSocial Science and Medicine
Volume259
Early online date12 Mar 2020
DOIs
Publication statusPublished - Aug 2020
Externally publishedYes

Keywords

  • Income inequality
  • Income rank
  • Psychosocial pathway
  • Relative deprivation
  • Self-rated health
  • Yitzhaki index

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