http://www.nber.org/papers/w8099.pdf

The author postulate that individual health is negatively affected by relative deprivation within a reference group, defined as the ratio to group mean income of the total "weight" of incomes of group members better-off than the individual; and argue that such a model is consistent with what we know about the way in which social status affects health, based on both animal and human models. The theory has the following predictions. Within reference groups, which may be as large as whole populations, mortality declines with income, but at a decreasing rate; the mortality to income relationship is monotone decreasing and convex. Analysis of the aggregate data shows that the effect of income inequality is not robust to the inclusion of other controls, particularly the fraction of blacks in the population. The fraction black is positively associated with white (male) mortality in both the individual and aggregate data and, once the fraction black is controlled for, there is no effect of income inequality on either male or female mortality.(Au) Document in PDF format; Acrobat Reader needed.