Housing assets and the socio-economic determinants of health and disability in old age
Introduction
Health and well being are well known to be dependent on individual access to material conditions, which are usually proxied by individual income and wealth. However, whilst universal health insurance schemes—based on the principle of “equal access for equal need irrespective of wealth”—should have levelled out, if not wiped out, income-related health disparities (Wagstaff et al., 1991), they often do not succeed in redistributing wealth. Access to individual assets, such as suitable housing, is largely determined by market mechanisms. Hence, if housing assets affect health, socio-economic health inequalities might well prevail over time. This is particularly the case for the elderly. Compared to the young and middle-aged age groups, older people may be less affected by income because they rely heavily on their own wealth. Older people are found to have, on average, low incomes and disproportionately high levels of wealth, which they have accumulated over their lifetime through mortgage payments (Hancock, 1998). Although some evidence from the US suggests that low-income elderly people tend to have low housing equity as well (Venti and Wise, 1989, Venti and Wise, 1991), more recent studies from the US indicate that the wealth accumulation that occurred in the 1990s went overwhelmingly to older households (Gale and Pence, 2006).
Existing studies on the association between wealth and health status do not allow us to draw clear conclusions. Meer et al. (2003) finds that wealth affects self-reported health, though individuals appear to adapt to higher wealth. Other studies do not find significant wealth effects (Adams et al., 2003). However, it is important to point out some caveats to these findings. First, it is well known that broad measurements of wealth can be difficult to gauge empirically. Hence, rather than measuring wealth in general terms, one could argue in favour of concentrating on wealth indicators that can be easily measured with some precision, such as housing assets. This is especially the case in settings where house prices have been subject to considerable price increases over the last decade, as is the case in most European countries. Second, rather than limiting the study to standard measures of self-reported health, one could employ both continuous measures of health and measurements of disability since they would presumably be especially relevant for older people.1 Finally, by looking at housing wealth it is possible to trace the combined effect of wealth and housing-specific conditions that confer value on the dwelling,2 and which are expected to influence socio-economic status in old age. Older people's income usually decreases after retirement and they spend more time at home. Thus, one would expect income to have less impact on health in old age than it does in younger age groups (Hurd and Kapteyn, 2003).
This paper examines the empirical association between health-and-disability and housing characteristics including housing tenure and housing wealth. It uses a sample of the Spanish elderly (or late middle-aged) population so as to distinguish vigorous older people from those who are more likely to suffer some form of health-related impairment. In doing so, this paper does the following:
First, we assess whether socio-economic position is still a significant factor when housing assets are included (RQ1). This evidence complements results from other studies indicating that, in old age, homeownership is a better proxy for social position than income (Macintyre et al., 1998, Macintyre et al., 2003).
Second, we examine the influence of education and contextual housing factors reflected in house prices can be empirically examined (RQ2). Housing wealth has been significantly overlooked despite its potential effect on health, whether direct (wealth) or indirect (housing value characteristics).3
This study has interesting applications in Spain, where the house-price market has experienced its highest growth in the last few decades. One of the countries where house prices have increased more abruptly in the world over the last decade is Spain. At the same time, Spain has one of the highest rates of home ownership in Europe (Organisation for Economic Cooperation and Development (OECD), 2003). Homeowners in Spain include an elderly population for whom housing is the main family asset; 82% of the elderly are homeowners (Spanish complementary social services (IMSERSO, 2002)). Eighty-eight percent of the elderly live in their own homes and 12% live with their children, probably because the community care network is still developing.4 As well as declining health, elderly people may suffer from forms of disability that reduce their quality of life. These can be measured on standard measurement scales for limitations in ‘activities of daily living’ (ADL) or ‘instrumental activities of daily living’ (IADL). On the basis of its results, this study reports the income-related concentration indexes for health and disability and the influence of wealth (RQ3).
The paper is structured as follows: Health, housing and housing wealth contains a conceptual framework for understanding how housing assets can influence health. Data and methods provide the data and describes the methods used. Results report the results, and Discussion contains the conclusions.
Section snippets
Housing assets and characteristics as health production determinants
Housing tenure has been consistently observed to be associated with mortality and morbidity (Macintyre et al., 2003). Housing influences health through a variety of psychosocial mechanisms linked to building type, height above the ground, and housing tenure (e.g., ownership), which appears as a central factor in individual well being. Arguably, the elderly suffer the consequences of negative housing characteristics most severely as they have weaker health, are more susceptible to morbidity, and
The data
Between September and November 2003, the Institute Edad & Vida (a Barcelona-based institution dedicated to promoting quality of life for old people) carried out a survey of people thought to be old enough to have reasoned preferences for old-age housing, in other words people aged 55 and over. The survey collected data from a representative Spanish population sample of 729 individuals aged over 55, recording the preferences of people who were elderly at the time or likely become elderly within
Health production determinants in old age
The results of the study bore out the hypothesis that SRHS in old age rises significantly with individual housing equity (Table 2). Indeed, an individual with twice the housing equity could be expected to report 3.4% higher health status. Income was not a significant predictor of health despite displaying a positive coefficient as expected. Interestingly, even when housing equity was deleted, income still did not rate as significant, suggesting that differences in income, especially pension
Discussion
Whether income and/or wealth are responsible for differences in health and disability is an issue for empirical scrutiny. This study has attempted to examine the influence of housing assets in determining health and disability in old age. The rationale behind the study is that the existence of income-related socio-economic factors of health in old age has been questioned in some studies. In the light of the evidence that elderly people are typically income-low but relatively wealthy this study
Acknowledgements
We would like to thank colleagues attending the CAEPS Microeconomics and Social Policy Seminars at the University of Barcelona and the Informal Health Seminars at the London School of Economics for their comments. Joan Costa-Font would like to express his gratitude to the Catalan government for funding research project 2005-SGR-460 and to the Ministry of Science and Technology for funding project SEJ2005-03196/ECON.
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