Household Assets and Health in China Evidence and Policy Implications

China’s health care reform of the 1990s has not yielded much success. The market-oriented health system has resulted in declines in fairness of health services and efficiency of investment in the health sector. Further health care reform will be required. Among many options, asset-based policy has demonstrated some potential in domestic policy development. To provide evidence to inform health policy development in China, this study focuses on effects of household assets on health in China. Specifically, the current study examines how household assets may affect health status and how assets differ from income in predicting health status. Using a random sample of Chinese elderly, we find that asset holding in the form of household durables and household utilities has both direct and indirect effects on health status. Household assets directly affect access to medical care and indirectly affect health by influencing health behavior and psychological condition. In other words, in addition to economic effects, household assets appear to have behavioral and psychological effects on health. Interestingly, these effects appear to be associated with assets, but not with income. Implications for asset-building policy are suggested as a complement to existing health care models. Key words: health, asset building, Chin