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January 30, 2023

“If you have your health, you have everything”? The true value of health

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This completely trite saying is known to most English-speakers; but is it correct? I doubt it: I could be completely healthy but lack enough income to allow me to enjoy even a minimally nutritious meal. I could be so busy, feeling so short of time, that although in excellent health I am totally frazzled.

One economic way of thinking about health is how it affects our ability to enjoy the things we are doing. Economists view us as taking the time we have and using it along with our income to create “commodities” that we enjoy consuming. Some take a lot of money and very little time—me watching a Rolling Stones concert in Madison Square Garden in my home town, for example. Others take little money but a lot of time—sleep, for example. For all of us both money and time are scarce; we want more of each. 

The average person in industrialized countries has seen their income after inflation more than double in the last 50 years. Our life expectancy has increased, but nowhere nearly so much—perhaps 25% at most. We have increasing amounts of income to be enjoyed in only slightly more time. We are increasingly “time poor,” and that especially so among those people with high incomes. Even people who don’t work for pay at all express above-average feelings of being short of time if their incomes are above-average. The other side of the coin is that people with low incomes don’t feel very much time pressure, but complain much more than others about their insufficient income. Main point: Either income or time is relatively scarce for everyone.

How does health play into this? Good health enables you to enjoy the combinations of money and time that you choose because it enables you to combine these more efficiently—it takes you less time to do things. It also expands the range of combinations that you can consume. It’s easier to go hiking in the mountains if you don’t have severe COPD; and it’s easier to do the laundry if you don’t have severe osteoarthritis. Obversely, physical disabilities make it more difficult to travel to a location where you can spend time and money enjoyably. 

Of course, it’s enjoyable per se to be healthy; but good health also augments our ability to enjoy the time that we spend and the things that we spend our time on. Very few countries have sufficient data to make this calculation possible; but among Australian men, being in excellent, very good, or good health reduces feelings of being pressed for time as much as would a 21% increase in pay. Among German men, the same calculation shows that good health is equivalent to their having 43% more money to spend.

Being healthy is a gift—it is equivalent to a gift of time and money.

© Daniel S. Hamermesh

Daniel S. Hamermesh is Editor-in-Chief, IZA World of Labor and Professor of Economics Emeritus, University of Texas at Austin and Royal Holloway University of London.

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