This paper empirically examines the role of household endowments in determining the poverty status of households, it models household's ill-health status, and it investigates the linkages between household's health and poverty status using micro-level survey data of 1,530 households collected in 2005 in rural Uttaranchal, a northern state in India. We find that human and physical capital endowments of households are important determinants of the poverty status of households, over and above effects attributable to the macro-economy and the household's social status and region of residence. The household's ill-health is determined by the household size, child dependency, hygiene practices, and community resource externalities. We show that the household's ill-health is not central to the understanding of household's poverty status, while poverty status
is central to the understanding of household's health. Hygiene and sanitation is at the center of linkages between the household's ill-health and its poverty status. Poverty status influences the household's health through its impacts on the household's hygiene practices and access to clean water for drinking and sanitation. We argue that if the goal of public policy is to prevent the recurring health problems of households in the rural areas of India, the public provision of clean water to every household is a far more certain and effective policy instrument than alternative ways of boosting health such as poverty reduction strategies. The public provisioning of clean water is also justified on the basis of its associated positive externalities for health outcomes.

Keywords: poverty status, health, socioeconomic status, Uttranchal.

JEL Classification Number: I1, I30, O15.