Empirical Economic Bulletin, An Undergraduate Journal


This paper uses regression analysis with panel data in order to investigate the relationship between income and health indicators in ten high income countries. The purpose of this study is to investigate if income has a significant and positive effect on the health of a nation’s population. In theory, the health of the population in high income countries should be positively correlated to the country’s income because the wealthier a nation, the more available resources the nation has to allocate to health care spending. The dependent variables in this study are life expectancy at birth and infant mortality rate. The independent variables are GDP per capita, government expenditure on health care, government expenditure on education, unemployment rate, alcohol consumption, and pollution. The data covers a ten-year time frame from 2004-2013. The regression results indicate that GDP per capita does have a positive and significant effect on health indicators for these countries.