The traditional approach when using a multiple morbidity variable is to dichotomize the variable into "bad health" and remaining categories. It is a disadvantage of this traditional approach which uses a dichotomized morbidity variable that it entails a loss of information due to dichotomization, that the cut off point can be chosen arbitrarily, and that the cut off point may affect the measured degree of inequality. An alternative method was recently developed in connection with the project "Equity in the finance and delivery in health care in European Countries". This alternative approach entails the construction of a continuous latent variable from the categorial variables. Working with a continuous variable allows some computations resulting in a quantification of the income-related (in)equality in health which is not allowed by using the categorial variable. The method is used in the following to analyze inequalities in health in Denmark, based on four national surveys carried out between 1987 and 1995. The results from Denmark were not included in the ECuity Project. however, results from the present may also be valuable for comparisons. The approach is based on a grouping individuals by income rather than socioeconomic groups. These two variables are obviously not identical; but income may be seen as a substitute for a socio-economic classification of the individuals. It is a basic tenet that inequality exists if health varies systematically with income.