Evidence from various academic fields indicates that mental health and income are correlated. Additionally, evidence exists that an increase in income improves psychological well-being and evidence that poor psychological well-being negatively impacts income. The difficulty is that there is no definitive work pinpointing the direction of the causal relationship between income and psychological well-being, but studies are attempting to find out. Hence, this paper attempts to contribute to ongoing work with an IV estimation approach to determine the causal effects of psychological well-being on poverty. Using data provided by Haushofer and Shapiro, this paper finds evidence that an increase in income causes a reduction in depression and stress levels, along with increases in happiness and life satisfaction of the study participants. Additionally, it is found that these improvements in psychological well-being lead to increases in monthly household expenditure, especially health care. Furthermore, these findings indicate that when women receive a cash transfer, a significant proportion of that transfer is devoted to health care. All the estimates presented in the paper indicate that an improvement in economic well-being leads to an improvement in the mental health of the poor, which causes them to spend more and focus more on their health care.
| Identifer | oai:union.ndltd.org:netd.ac.za/oai:union.ndltd.org:uct/oai:localhost:11427/31428 |
| Date | 02 March 2020 |
| Creators | Oaker, Brandon |
| Contributors | Keswell, Malcolm |
| Publisher | Faculty of Commerce, School of Economics |
| Source Sets | South African National ETD Portal |
| Language | English |
| Detected Language | English |
| Type | Master Thesis, Masters, MCom |
| Format | application/pdf |
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