The Impact of Poverty on Health and Well-Being in Rural Malawi

Brian Chin, University of Pennsylvania

This paper isolates the causal link of poverty on health status and subjective well-being of the rural population in Malawi using three waves of household panel data spanning the period 2004-2008. Several suitable instruments for economic resources, e.g. rainfall and the price of salt, are employed in both instrumental variables and fixed effects strategies to consistently address endogeneity of the wealth to health relationship. This link is examined in the context of Malawi, a low-income country with high background morbidity and mortality, as well as an AIDS epidemic, high fertility, and poor reproductive health. The analyses show that a doubling of income improves general health status by 23.6% and well-being by 20.4% of rural Malawians. Economic hardship has health and well-being implications to individuals and families in rural Malawi that are also likely found in other regions and countries in sub-Saharan Africa facing a novel set of critical development challenges.