Substituting Leisure for Health Expenditure: A General Equilibrium-Based Empirical Investigation
AbstractWe develop a general equilibrium macroeconomic model with endogenous health accumulation, and we use the model's equilibrium condition to estimate the elasticity of substitution between medical care and leisure time in maintaining health, based on a cross-country panel dataset. Our econometric estimates imply that increasing health-enhancing leisure time may substantially reduce the nation's medical expenditure and help resolve its pressing fiscal uncertainty. Our study highlights the importance of several current nationwide campaigns aimed at improving national health status, from not only health but macroeconomic perspectives. Our study also provides a guidance to a growing macro-health literature in modeling health production.
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Bibliographic InfoPaper provided by Vanderbilt University Department of Economics in its series Vanderbilt University Department of Economics Working Papers with number 13-00020.
Date of creation: 23 Dec 2013
Date of revision:
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Web page: http://www.vanderbilt.edu/econ/wparchive/index.html
general equilibrium; macro-health; health care; leisure time; elasticity of substitution; fiscal uncertainty;
Other versions of this item:
- Sheng-Ti Hung & Kevin X.D. Huang & Hui He, 2013. "Substituting Leisure for Health Expenditure: A General Equilibrium-Based Empirical Investigation," 2013 Meeting Papers 1310, Society for Economic Dynamics.
- E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment
- I1 - Health, Education, and Welfare - - Health
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-12-29 (All new papers)
- NEP-HEA-2013-12-29 (Health Economics)
- NEP-MAC-2013-12-29 (Macroeconomics)
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