Health and Wealth: Cause or Effect?

Question 1

claim of Bloom and Sachs (1998)

Answer 1

poor health outcomes and high levels of tropical disease are a major causal factor driving low economic growth rates and slow economic development

tropical disease burden leads to low labour productivity and low income per capita

Question 2

how to interpret corr(A,B)>0?

Answer 2

A causes B

B causes A

A causes B and B causes A simultaneously
- feedback effect, not mutually exclusive
- simultaneity

some other factor C causes both A and B
- omitted variables/confounding

purely incidental association

Question 3

claim of Acemoglu, Johnson and Robinson (2001)

Answer 3

Africa’s tropical disease led European imperialists to establish exploitative, extractive government institutions and thus low per capita incomes today
- less rule of law and typically violent resource extraction

tropical diseases matter through a historical channel and are no longer that big of an impediment today

same argument as Bloom and Sachs in that tropical disease lowered economic development but through different channels

17th-19th century mortality explains 3/4 of current income differences across former colonies

Question 4

key to dealing with Africa’s geographical inheritance according to the two different theories

Answer 4

Acemoglu, Johnson and Robinson (2001)
- addressing the quality of government institutions today
- more attachment to this since A factors in the growth model are seen as key long-run drivers as k only gets you so far

Bloom and Sachs (1998)
- addressing the tropical disease burden
- improving health in terms of human capital k

Question 5

health, education and income

Answer 5

education as a possible channel linking health and income

could it be the case that there’s lower incomes in places with high disease burden because poor health affects education?
- if you don’t make investments ini education, they might be less productive as adults with lower income

Question 6

global tropical health problem: worm infections

Answer 6

among the world’s most prevalent diseases
- much less common in temperate/cold climate
- range of negative health consequences

in parts of SSA, 20%-50% or 50%+ of the population have infections - school-age children as the most susceptible

transmission through poor hygiene and sanitation
- eliminating one infection may reduce transmission
- positive externalities/spillovers

highly-effective treatment is cheap and administered infrequently