Self-Harm is a Luxury
By Bryan Caplan
From Cutler and Lleras-Muney, “Understanding Differences in Health Behaviors by Education” (Journal of Health Economics 2010):
Differences in prices or in response to prices are a second potential reason for education-related differences in health behaviors. This shows up most clearly in behaviors involving the medical system. In surveys, lower income people regularly report that time and money are major impediments to seeking medical care. Even given health insurance, out-of-pocket costs may be greater for the poor than for the rich–for example, their insurance might be less generous. Time prices to access care may be higher as well, if for example, travel time is higher for the less educated.
A consideration of the behaviors in Table 1 suggests that price differences are unlikely to be the major explanation, however. While interacting with medical care or joining a gym costs money, other health-promoting behaviors save money: smoking, drinking, and overeating all cost more than their health-improving alternatives. It is possible that the better educated are more responsive to price than the less educated, explaining why they smoke less and are less obese. But that would not explain the findings for other behaviors which are costly but still show a favorable education gradient: having a radon detector or a smoke detector, for example. Still other behaviors have essentially no money or time cost, but still display very strong gradients: wearing a seat belt, for example.
More detailed analysis of the cigarette example shows that consideration of prices exacerbates the education differences. A number of studies show that less educated people have more elastic cigarette demand than do better educated people. Prices of cigarettes have increased substantially over time. Gruber (2001) shows that cigarette prices more than doubled in real terms between 1954 and 1999; counting the payments from tobacco companies to state governments enacted as part of the Master Settlement Agreement, real cigarette taxes are now at their highest level in the post-war era. Yet over the same time period, smoking rates among the better educated fell more than half, and smoking rates among the less educated declined by only one-third. For these reasons, we do not attribute any of the education gradient in health behaviors to prices. [footnotes omitted]