Is Mortality in Developing Countries Procyclical? Health Production and the Value of Time in Colombia's Coffee-Growing Regions

Grant Miller, Stanford University and National Bureau of Economic Research (NBER)
Piedad Urdinola, Universidad Nacional de Columbia, Bogota

The inability to smooth consumption in developing countries is thought to make health vulnerable to sudden economic downturns. However, studies suggesting this relationship often examine shocks that directly influence health independently of economic conditions (such as flooding or grain price fluctuations). This paper investigates how world coffee price shocks influence infant and child mortality in Colombia’s coffee growing regions. As in wealthy country studies, we find evidence of procyclical mortality and countercyclical health investments that are linked to changes in the opportunity cost of time. These results suggest that in rural Colombia, (1) Any adverse health consequences of incomplete consumption smoothing during bad economic times are dominated by increases in time-intensive health investments, and (2) The relative price of health is a more powerful determinant of mortality than wealth.

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Presented in Session 38: Economic Factors and Child Development I