1990 household data suggest levels of poverty among American Indians similar to those for blacks, and levels for Alaska Natives similar to those for Asians (U.S. Census Bureau, 1990). Socioeconomic variations such as these, coupled with similar variations at younger ages, partly explain racial and ethnic differences in a number of health outcomes (Hayward et al., 2000; Smith and Kington, 1997).

When socioeconomic status is controlled, health differences between blacks and whites in mortality and functional limitations are sometimes eliminated (Kington and Smith, 1997), though differences may not disappear for specific diseases. Good examples of large racial or ethnic differences that are not explained by socioeconomic status are hypertension among black men and diabetes among black and Hispanic men (Crimmins et al., 2004). There also appear to be significant nonlinearities in the effects of income and wealth, as these factors have a much stronger effect on health in the bottom third of their respective distributions than in the top third. Taking these nonlinearities into account may help further explain black-white health differences. However, the role of socioeconomic status in explaining Asian-white differences is less clear, and it does not explain the relative health advantage of Hispanics.

One complication in any comparison is the possibility that socioeconomic measures may signify something different for each group (Kaufman et al., 1997; Williams and Collins, 1995). Black high school graduates, for instance, do not exhibit the same levels of knowledge and skills as whites (Maxwell, 1994). Equal incomes may not be truly equal if they do not translate into the same purchasing power in different communities (Alexis et al., 1980; Williams and Collins, 1995). The effect on health differences if