The socioeconomic gradient in health: how important is material deprivation?

In this paper we use the Spanish Living Conditions Survey (2005-2008) to investigate the existence of a socioeconomic gradient in health when alternative measures of socioeconomic status, apart from income, are considered. In particular we construct a material deprivation index that reflects minimum standards of quality of life and that incorporates comparison effects with societal peers and we estimate health equations with probit adapted least squares, fixed effects and instrumental variables. Our results reveal that the relationship between health and income operates through comparison information with respect to societal peers. In contrast, material deprivation in terms of financial difficulties, basic necessities and housing conditions exerts a direct effect on individual health. Mixed evidence is found with respect to gender.