Assignment:
1. On the basis of the graph on page 20 of The Spirit Level (shown below), Richard Wilkinson and Kate Pickett argue that greater inequality causes health problems. Explain various flaws in this argument.
2. Perform an econometric analysis using the data in the OECD Better Life Index and elsewhere to investigate the following three hypotheses:
a) Greater income inequality is associated with lower health (the Spirit Level hypothesis).
b) Higher income is associated with better health.
c) A greater obesity rate is associated with lower health.
Explain your methodology in terms of the sources of data, definition of variables, the selection of variables, method of analysis and interpretation of results.