Income, health, and well-being in rural Malawi.

This paper attempts to isolate the causal link of income on health status and subjective well-being for the rural population in Malawi using three waves of household panel data spanning the period 2004-2008 from the Malawi Diffusion and Ideational Change Project (MDICP) and the Malawi Longitudinal Study of Families and Health (MLSFH). Malawi is a low-income country with high background morbidity and mortality, as well as an AIDS epidemic, high fertility, and poor reproductive health. Instrumental variables and fixed effects strategies are used to try to address endogeneity of the income to health relationship. The analyses show that a 10% increase in income improves mean general health status of rural Malawians by 1.0% and mean subjective well-being by 1.2%.