Advanced Search
MyIDEAS: Login

Is there a trade-off between longevity and quality of life in Grossman's pure investment model?

Contents:

Author Info

  • Christoph Eisenring

    (University of Bern, Department of Economics, Bern, Switzerland)

Registered author(s):

    Abstract

    The question is posed whether an individual maximizes lifetime or trades off longevity for quality of life in Grossman's pure investment (PI)-model. It is shown that the answer critically hinges on the assumed production function for healthy time. If the production function for healthy time produces a trade-off between life-span and quality of life, one has to solve a sequence of fixed time problems. The one offering maximal intertemporal utility determines optimal longevity. Comparative static results of optimal longevity for a simplified version of the PI-model are derived. The obtained results predict that higher initial endowments of wealth and health, a rise in the wage rate, or improvements in the technology of producing healthy time, all increase the optimal length of life. On the other hand, optimal longevity is decreasing in the depreciation and interest rate. From a technical point of view, the paper illustrates that a discrete time equivalent to the transversality condition for optimal longevity employed in continuous optimal control models does not exist. Copyright © 2000 John Wiley & Sons, Ltd.

    Download Info

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below under "Related research" whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Bibliographic Info

    Article provided by John Wiley & Sons, Ltd. in its journal Health Economics.

    Volume (Year): 9 (2000)
    Issue (Month): 8 ()
    Pages: 669-680

    as in new window
    Handle: RePEc:wly:hlthec:v:9:y:2000:i:8:p:669-680

    Contact details of provider:
    Web page: http://www3.interscience.wiley.com/cgi-bin/jhome/5749

    Related research

    Keywords:

    References

    References listed on IDEAS
    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
    as in new window
    1. Grossman, Michael, 1998. "On optimal length of life," Journal of Health Economics, Elsevier, vol. 17(4), pages 499-509, August.
    2. Ehrlich, Isaac & Chuma, Hiroyuki, 1990. "A Model of the Demand for Longevity and the Value of Life Extension," Journal of Political Economy, University of Chicago Press, vol. 98(4), pages 761-82, August.
    3. Grossman, Michael, 1972. "On the Concept of Health Capital and the Demand for Health," Journal of Political Economy, University of Chicago Press, vol. 80(2), pages 223-55, March-Apr.
    4. Dorfman, Robert, 1969. "An Economic Interpretation of Optimal Control Theory," American Economic Review, American Economic Association, vol. 59(5), pages 817-31, December.
    Full references (including those not matched with items on IDEAS)

    Citations

    Lists

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    Statistics

    Access and download statistics

    Corrections

    When requesting a correction, please mention this item's handle: RePEc:wly:hlthec:v:9:y:2000:i:8:p:669-680. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing) or (Christopher F. Baum).

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.