How much of the relation between population mortality and unequal distribution of income is a statistical artefact?

Introduction

The absolute income hypothesis—that holding other factors constant, the higher an individual's income the better is their health—is supported by a considerable body of evidence.1 2 3 However, according to the more recent relative income hypothesis, an individual's health is also affected by the distribution of income within society. Someone with a given income would have worse health if he or she lived in a society with greater inequality of income than in a society in which income is more equally distributed.4 Several recent papers examining the relation between population mortality and income inequality seem to support the relative income hypothesis.5 6 7 8 9 10 11 They suggest that greater inequality is associated with higher population mortality and that this relation persists even when account is taken of the average income of the population.

However, some scepticism has been expressed about the relative income hypothesis.12 To quote one of the papers cited above, the “mechanisms underlying the association between income distribution and mortality are poorly understood.”7

A statistical artefact may explain the relation

There may be a very simple explanation for some, or all, of the reported associations between inequality of income and population health used to support the relative income hypothesis. They may be, at least partly, a statistical artefact caused by using population data rather than individual data. A positive correlation between population mortality and income inequality can arise at aggregate level even if inequality has no effect on the individual risk of mortality. Thus, we do not need the relative income hypothesis to explain the observed associations between population health and income inequality—the absolute income hypothesis will serve.

Mortality risk and absolute income

The absolute income explanation can be illustrated with the help of the figure (the mathematical argument is presented in the Appendix 1). In this, the individual risk of mortality depends …