The Causal Relationship Between Income Deprivation and Depression with Special Emphases on the Importance of Spatiality

Abstract

Abstract Subject and purpose of work This paper focuses on the causal relationship between territorial levels of income deprivation and depression. It seeks to shed light on the importance of spatial dependence in said relationship. Materials and methods The paper uses the Scottish Index of Multiple Deprivation as a data source to model the level of depression present across Scotland dependent on income deprivation and health and education control variables. OLS (Ordinary Least Squares) modelling is used to confirm causality and a SARMA (Spatial Autoregressive Moving Average) model is built to capture the spatial dimension as well. Results Evidence is found that geographical space has an effect on the relationship between depression and deprivation, and the presence of spillover effects to neighbouring areas, and hence a multiplier effect can also be assumed. Conclusions Taking the found spatial multiplier effect into account when making resource allocation decisions could help to better target policies regarding e.g. social wellbeing and mental health.