The main objective of this paper was to consider the influence of absolute and relative living standards (GDP per capita in Purchasing Power Parities and income inequality) on mortality differences between European countries.Rather than analysing all selected countries at once, Western and Eastern European countries were analysed separately. This was prompted in part due to their long period of diverging political and economic systems, which made it impossible to compare certain factors that were relevant for this study.The analyses showed that both absolute and relative income differentials are important, but absolute prosperity was more important than relative prosperity. Moreover, absolute income played a greater role in Eastern Europe than in Western Europe. The fact that the effect of GDPc on total mortality (both in terms of the coefficient value and the elasticity, as shown in Table 2) was greater in Eastern Europe, where absolute standard of wealth is lower, was not unexpected. GDPc and mortality were not linearly associated with
each other, i.e. health gains in the East will be greater for a given amount of extra wealth than in the West (although within both groups of countries little non-linearity could be discerned). More surprising was that absolute income was also an important variable for Western Europe, being significant in 6 out of the 7 models, including total mortality. This contradicts the proposition by Wilkinson (1992), who claimed that it is not the richest societies but developed countries who have the smallest income differences between rich and poor that have the best health. The results of Wilkinson and others in the past
showing that relative income is the more important income indicator, is only valid for certain causes of death. If we compare the impact of both absolute and relative income on mortality we find that only for mortality in Eastern Eurpope related to LDC is the elasticity of relative income slightly higher than that of absolute income. In all other cases when both income measures were present in the model, the absolute income elasticity is higher, indicating that it has a stronger impact.