Comparative Dynamics in Health Economics: Some Useful Results
AbstractIn analysis of atemporal models, comparative statics experiments are typically carried out, often employing envelope properties, such as Roy's identity, Hotelling's lemma and Shephard's lemma, in order to simplify the analysis. In analysis of dynamic models, such experiments are seldom undertaken because of the complexity involved. In this note, we illustrate how to employ dynamic envelope properties in order to arrive at surprisingly simple comparative dynamics results in optimal control theory models. We also extend the envelope theorem to an infinite horizon problem with fundamental time dependency, and apply the result to parametric changes in death risks and health production functions.
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Bibliographic InfoPaper provided by Stockholm School of Economics in its series Working Paper Series in Economics and Finance with number 17.
Length: 14 pages
Date of creation: May 1994
Date of revision:
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Dynamic envelope theorem; risk; health; comparative dynamics;
Find related papers by JEL classification:
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- C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
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