The purpose of this paper is to investigate the determinants of aggregate suicides in 15 OECD countries during 1960-2010 using an economic model where changes in the welfare of consumers play the critical role for determining the number of suicides.
The hardship index based on economic theory is developed. In estimating the model, the authors apply the Pesaran et al. (2001) approach that allows the simultaneous estimation of the long-run and short-run parameters. To make sure that the authors’ findings are not specific to their method, the authors also use the generalized method of moments estimation in the panel set-up.
The authors found a relatively strong positive relationship between macroeconomic conditions, especially changes in aggregate consumption, and suicides. The relationship appears to be robust also in terms of the various control variables cited in the literature. The hardship index which is based on the habit persistence model of consumption predicts and explains the long-term behavior of suicides in most of the countries. Thus, the hardship index is a better economic explanatory variable than the unemployment rate or other proxies describing economic conditions.
Marrying the economic theory and econometric methods produces a reasonable empirical model to explain the connection between aggregate economic conditions and suicides.
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