The role of lifestyle in mediating the relationship between socio-economic characteristics and health has been discussed extensively in the epidemiological and economic literatures. Previous analyses have not considered a formal framework incorporating unobservable heterogeneity. In this paper we develop a simple economic model in which health is determined(partially) by lifestyle, which depends on preferences, budget and time constraints and unobservable characteristics. We estimate a recursive empirical speci cation consisting of a health production function and reduced forms for the lifestyle equations using Maximum Simulated Likelihood for a multivariate probit model with discrete indicators of lifestyle choices and self-assessed health(SAH) on British panel data from the 1984 and 1991 Health and Lifestyle Survey. We nd that prudent drinking and not smoking in 1984 have dramatic positive e ects on the probability of reporting excellent or good SAH in 1991. The failure of epidemiological analyses to account for unobserved heterogeneity can explain their low estimates of the relevance of lifestyle in the socio-economic status-health relationship. Accounting for unobserved heterogeneity also leads us to conclude that indicators for sleep, exercise, and breakfast in 1984 are unimportant for SAH in 1991. JEL codes I1 C0

Data in this report from health and demographic surveys present statistics by age and other variables on ambulatory medical care; nursing and related care homes; health promotion and disease prevention; aging in the eighties; and trends in smoking, alcohol consumption, and other health practices, Estimates are based on the civilian noninstitutionalized population of the United States. These reports were originally published in 1985 and 1986.

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The past decade has seen increasing recognition of the importance of personal health behaviors for the prevention of illness and disability, A pioneer work in this field was a study conducted in Alameda County, Calif., in the mid-