Exploring the Dynamic Interaction between Income and Health: Time-Series Evidence from Scandinavia

This paper complements existing cross-section and panel data analyses of the interaction of income and health outcomes by applying a cointegrating VAR model of income and health to time-series data for several Scandinavian countries. The results are consistent with previous crosssection and panel results, but also highlight the complexity and heterogeneity of the dynamic relationships that generate them. In particular, there are substantial differences across countries in the relative importance of different underlying causes of the health-income correlation. JEL Classification Numbers: I10, O52 § Department of Economics, University of Leicester. * Department of Economics, Melbourne University. Address for correspondence: Department of Economics, University of Leicester, Leicester LE1 7RH, UK. Email address: [email protected].