The effect of income shocks on health behaviors: Evidence from a low-income country

This study examines the income effect on health spending and health behaviors in Vietnam. We measure income shock by lottery prizes, controlling for spending on the lottery. Lottery prizes have no significant effect on the healthcare utilization of individuals. However, we find that lottery winnings result in a significant increase in spending on healthcare. A 1% increase in lottery winnings results in a 0.08% increase in expenditure on medicine and a 0.09% increase in the total amount individuals spend on healthcare. The effect on expenditure on healthcare tends to be larger for older people. A concern with increased income is the unexpected effect on risky health behaviors, such as smoking and drinking. In this study, we do not find that lottery prizes lead to greater spending on tobacco and alcohol.& COPY; 2023 Economic Society of Australia, Queensland. Published by Elsevier B.V. All rights reserved.