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TERRA ECONOMICUS

How does the incidence rate affect real income across Russian regions?


TERRA ECONOMICUS, , Vol. 22 (no. 2),

The paper aims at estimating the effect of increase in incidence rate on real income in the regions of the Russian Federation. According to the main research hypothesis, underestimation or overestimation of this effect may occur due to false positive and false negative errors. We apply the method of instrumental variables to improve the accuracy of estimates. Our results show that an increase in the incidence rate in the region by 1% on average results in a decrease in real income by 0,54%, which is three times higher than the estimates obtained from the basic models. We attribute the discrepancy occurred to such factors as reverse causality, missing variables, and peculiarities related to data collection. Practical implications of our research are that the findings might strengthen the arguments for the increased funding of health care programs and support intervention decision making related to effective reduction of morbidity and mortality from various diseases across the regions of the Russian Federation. Our study also contributes to the theoretical literature discussing approaches to assess the relationship between real income and a combination of social and demographic factors at the regional level.
Citation: Nagapetyan A.R., Subbotovsky D.A., Pavlova T.I., Li J. (2024). How does the level of morbidity affect the indicator of real income of the population in the regions of the Russian Federation?Terra Economicus 22(2), 77–95 (in Russian). DOI: 10.18522/2073-6606-2024-22-2-77-95
Acknowledgment: The study was funded by the Ministry of Science and Higher Education of the Russian Federation, project № FZNS-2023-0016 “Sustainable Regional Development: Efficient Economic Mechanisms for Organizing Markets and Entrepreneurial Competencies of the Population under Uncertainty (Balancing Security and Risk)”.


Keywords: real income; incidence rate; instrumental variables estimation; decision making; quasiexperimental methods; healthcare fina

JEL codes: I14; I15; C54

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Publisher: Southern Federal University
Founder: Southern Federal University
ISSN: 2073-6606