Advanced Search
MyIDEAS: Login to save this paper or follow this series

Prevention and Cure Efforts Both Substitute and Complement

Contents:

Author Info

  • Hennessy, David A.

Abstract

Suppose one could expend effort to prevent probabilistic transition to an adverse state, and also effort to expedite probabilistic transition to a beneficial state. Bearing in mind that the efforts occur in different states, should these efforts substitute or complement? Two appealing arguments are in conflict. If cure effort is costly, then the incentive to prevent should be high in order to avoid future cure effort costs, i.e. efforts are gross substitutes in demand. If prevention effort is costly, then the incentive to cure should be low since recidivism is likely, i.e. efforts complement. In a lifetime present value model, we show that both arguments have merit. We also show that the prevalence of the adverse state can rise with a subsidy on cure effort costs.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://onlinelibrary.wiley.com/doi/10.1002/hec.1270/pdf
Download Restriction: no

Bibliographic Info

Paper provided by Iowa State University, Department of Economics in its series Staff General Research Papers with number 35014.

as in new window
Length:
Date of creation: 29 Mar 2012
Date of revision:
Publication status: Published in Health Economics, April 2008, vol. 17, pp. 503-511
Handle: RePEc:isu:genres:35014

Contact details of provider:
Postal: Iowa State University, Dept. of Economics, 260 Heady Hall, Ames, IA 50011-1070
Phone: +1 515.294.6741
Fax: +1 515.294.0221
Email:
Web page: http://www.econ.iastate.edu
More information through EDIRC

Related research

Keywords: health care policy; lifetime present value; medical expenditures; poisson processes;

Other versions of this item:

This paper has been announced in the following NEP Reports:

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. Meier, Volker, 2000. "On the demand for preventive care," Munich Reprints in Economics, University of Munich, Department of Economics 19191, University of Munich, Department of Economics.
  2. Shapiro, Carl & Stiglitz, Joseph E, 1984. "Equilibrium Unemployment as a Worker Discipline Device," American Economic Review, American Economic Association, American Economic Association, vol. 74(3), pages 433-44, June.
  3. Tomas J. Philipson & William H. Dow & Xavier Sala-i-Martin, 1999. "Longevity Complementarities under Competing Risks," American Economic Review, American Economic Association, American Economic Association, vol. 89(5), pages 1358-1371, December.
  4. J. Williams & Rosalie Liccardo Pacula & Frank J. Chaloupka & Henry Wechsler, 2004. "Alcohol and marijuana use among college students: economic complements or substitutes?," Health Economics, John Wiley & Sons, Ltd., vol. 13(9), pages 825-843.
  5. Hey, John D. & Patel, Mahesh S., 1983. "Prevention and cure? : Or: Is an ounce of prevention worth a pound of cure?," Journal of Health Economics, Elsevier, Elsevier, vol. 2(2), pages 119-138, August.
  6. Gerald Nordquist & S. Y. Wu, 1976. "The Joint Demand for Health Insurance and Preventive Medicine," NBER Chapters, in: The Role of Health Insurance in the Health Services Sector, pages 35-72 National Bureau of Economic Research, Inc.
  7. Louis Eeckhoudt & Christian Gollier, 2005. "The impact of prudence on optimal prevention," Economic Theory, Springer, Springer, vol. 26(4), pages 989-994, November.
  8. Ehrlich, Isaac & Becker, Gary S, 1972. "Market Insurance, Self-Insurance, and Self-Protection," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 80(4), pages 623-48, July-Aug..
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Mario Menegatti, 2014. "Optimal choice on prevention and cure: a new economic analysis," The European Journal of Health Economics, Springer, Springer, vol. 15(4), pages 363-372, May.

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:isu:genres:35014. 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: (Stephanie Bridges) The email address of this maintainer does not seem to be valid anymore. Please ask Stephanie Bridges to update the entry or send us the correct address.

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.