Wealthier is healthier? Healthier is wealthier? A comprehensive econometric analysis of the European countries

Abstract

Healthier people contribute more to the development of the economy. Besides, in a better economy, people have a better quality and healthier life. At this stage, one has to ask which one precedes the other: health or wealth? To find the answer, this study aims to investigate the causality relationship between health and inclusive wealth in the European countries for the period of 1990-2015. The causality between health and inclusive wealth scores, which are estimated by cluster and discriminant analyses, is investigated by the panel causality test. The research results indicate bidirectional causality between health and inclusive wealth. A one-way causality is detected in 11 cases as being from inclusive wealth to health and in 8 the other way. Furthermore, a two-way causality is found in 2 countries. Among the results, it is noteworthy that 91% of the countries with causality from inclusive wealth to health are among the healthy countries.