Stat Methods Appl (2012) 21:211–226 DOI 10.1007/s10260-012-0188-1 Place of living and health inequality: a study for elderly Italians Elena Pirani · Silvana Salvini Accepted: 25 January 2012 / Published online: 11 February 2012 © Springer-Verlag 2012 Abstract The aim of this study is to explore if the context matters in explaining socioeconomic inequality in the self-rated health of Italian elderly people. Our hypoth- esis is that health status perception is associated with existing huge imbalances among Italian areas. A multilevel approach is applied to account for the natural hierarchical structure, as individuals nested in geographical regions. Multilevel logistic regres- sion models are performed including both individual and contextual variables, using data from 2005 Italian Health survey. We prove that individual factors (compositional effect), even representing the most important correlates of health, do not completely explain intra-regional heterogeneity, confirming the existence of an autonomous con- textual effect. These territorial differences are present among both Regions and large areas, two geographical aggregations relevant in the domain of health. Moreover, for some Regions, the account for contextual factors explains variations in perceived health, leading to an overthrow of the initial situation: these Regions perform better than expected in the field of health. For other Regions, the contextual elements intro- duced do not catch the milieu heterogeneity. In this regard, we expect, and solicit, a major effort toward data availability, qualitatively and quantitatively, that might help in explaining residual territorial heterogeneity in health perception, a fundamental starting point for targeting specific policy interventions. Keywords Self-rated health · Old people · Territorial differences · Multilevel model · Regions E. Pirani (B ) · S. Salvini Department of Statistics “G. Parenti”, University of Florence, Viale GB Morgagni 59, 50134 Florence, Italy e-mail: pirani@ds.unifi.it S. Salvini e-mail: salvini@ds.unifi.it 123