Individual vulnerability and the nurturing state: The case of self-reported health and relative income

The collected data are best described by a log-linear relationship between income and self-reported health. The empirical results confirm both hypotheses. We have found that (a) income inequality affects health at the individual level; (b) the level of self-reported poor health in the bottom deciles of the income distribution increases with the level of inequality in the country's income distribution; and (c) the relative income hypothesis has a stronger explanatory power for our results than the absolute income hypothesis. These results confirm the idea that for comparisons at the individual level, relative income matters more than absolute income. These findings have important policy implications.