Shubhangi Agarwal
Indian Institute of Management Ahmedabad
Somdeep Chatterjee
Indian Institute of Management Calcutta
Chirantan Chatterjee
SPRU-Sussex, U-Sussex Business School
Working Paper
JEL Codes:
I11, I12, I14, I15
● Sweet Cash: Is Healthcare a Normal Good for Women in Developing Countries?
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In this paper, we explore the little studied role of gender-based tastes and preferences in the empirical relationship between income and demand for health care. Using two novel datasets, one from a nationally representative household survey and another from proprietary electronic medical records from a hospital system, both from India, we show that estimated income elasticities of healthcare demand for women may be negative with consumption reallocation beyond health when income increases. Our identification strategy leverages exogenous variation in womens take-home salary incomes, generated by a 2018 change in India on the mandated rates of contribution to the employees provident fund which we use to estimate impacts on health care spending. The results are robust to a variety of tests and placebo analyses. The findings offer perhaps for the first time, a gender nuance to the famed Preston curve and the relationship between income and health with important policy implications.

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