Nutrition, Health And Efficiency

Using data from poor areas of rural China, the dissertation studies the relationship between health, nutrition and income. Since the relationship can go either way from one to another, the study not only discusses how health and nutrition responds to income, but explores how improvement in health and nutrition will affect productivity also.The response of nutrition and health to income is discussed in Chapter 1 and Chapter 2. Chapter 1 reviews the difficulties in estimation of nutrition elasticity with respect to income, as well as the ways to correct the biases. Chapter 2 has estimated the elasticity of nutrition after a brief description of Engel curve in rural China. Similar to the update results in other developing countries, the nutrition elasticity is not as high as expected in China. Close to zero in well-off families, the nutrition elasticity is quite elastic in the poorest families in rural China. The nonlinear elasticity curve suggests that economic growth might still be an effective means to alleviate poverty of the poorest poor in China.The impacts of nutrition and health on productivity are included in Chapter 3 to Chapter 5. Chapter 3 has reviewed the literature in studies of the relationship between health, nutrition and productivity, as well as the theory of efficiency wage. By looking at inter-relationships among the dimensions of human capital, Chapter 4 has discussed the biases resulted from the interaction among health variables when estimating the effects of health and nutrition on productivity. The last Chapter, Chapter 5, has estimated the effects of health and nutrition on productivity with controlling the "endogeneity" of explanatory variables. The results show that almost every dimension of health and nutrition is relevant to productivity in China. This suggests that investment in health and nutrition is critical to poverty lift in China.In brief, the contribution of the dissertation can be summarized in two points. First, it added new evidence to show the impacts of health and nutrition on productivity by using data from rural China and the estimated return of health and nutrition also has policy relevance to rural development in China.Second, it has revealed the limitation of instruments to consistently estimate the effect of health and nutrition. The literature generally explains endogeneity of one or two health variables with a set of instruments. But the study shows that this will not always lead to consistent estimation given the interaction of multi-dimensions of health and nutrition. And it still remains of omitted variable biases when variables of health and nutrition are not as many as needed. So, the consistent estimation of health and nutrition relies not only on the instruments but also on the number of control variables of health and nutrition.