Mental health, subjective well-being, and household health investment

Understanding how psychological factors influence health behaviors remains a critical gap in health economics research, particularly in rapidly developing economies like China. While studies have examined economic determinants of health investment, the role of mental well-being in shaping health expenditure decisions remains underexplored, especially across different income groups. Using the China Family Panel Studies 2020 dataset (n=8,843), we employ regression analyses with instrumental variables and heterogeneity tests to investigate how mental health affects household health investment patterns. Our findings reveal that better mental health significantly increases health-related expenditures, with stronger effects among lower-income households. Subjective well-being partially mediates this relationship, while socioeconomic factors, particularly education and household registration status, show varying impacts across income levels. These results suggest that psychological well-being plays a crucial role in health investment decisions, especially for resource-constrained households, highlighting the need for income-sensitive health promotion strategies in developing economies.