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Optimal Health Investment Strategies

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  • Forster, Bruce A

Abstract

This paper investigates the optimal health investment strategies for two modifications of a model proposed by V. Dardanoni (1986). The first modification retains the assumption of a constant marginal opportunity cost of health investment. In this case, the optimal strategy involves a most rapid approach path with investment taking on extreme values. In the second modification, the assumption of increasing marginal opportunity cost of investment eliminates the most rapid approach path feature and the optimal investment level varies continuously over time. The implications of considering finite lifespans explicitly are analyzed. A "turnpike property" is identified for the second modification. Copyright 1989 by Blackwell Publishing Ltd and the Board of Trustees of the Bulletin of Economic Research

Suggested Citation

  • Forster, Bruce A, 1989. "Optimal Health Investment Strategies," Bulletin of Economic Research, Wiley Blackwell, vol. 41(1), pages 45-57, January.
    • Handle: RePEc:bla:buecrs:v:41:y:1989:i:1:p:45-57
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    Citations

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    Cited by:

    1. Zon, A.H. van & Muysken, J., 1997. "Health, education and endogenous growth," Research Memorandum 006, Maastricht University, Maastricht Economic Research Institute on Innovation and Technology (MERIT).
    2. Martin Forster, "undated". "The meaning of death: some numerical simulations of a model of healthy and unhealthy consumption," Discussion Papers 00/34, Department of Economics, University of York.
    3. repec:dau:papers:123456789/7972 is not listed on IDEAS
    4. Katerina Koka & Audrey Laporte & Brian Ferguson, 2014. "Theoretical Simulation in Health Economics: An application to Grossman's Model of Investment in Health Capital," Working Papers 140010, Canadian Centre for Health Economics.
    5. Wei-Bin Zhang, 2018. "Health, Environment, and Wealth," Izvestia Journal of the Union of Scientists - Varna. Economic Sciences Series, Union of Scientists - Varna, Economic Sciences Section, vol. 7(3), pages 109-123, December.
    6. Forster, Martin, 2001. "The meaning of death: some simulations of a model of healthy and unhealthy consumption," Journal of Health Economics, Elsevier, vol. 20(4), pages 613-638, July.
    7. Liutang Gong & Hongyi Li & Dihai Wang & Heng-fu Zou, 2010. "Health, Taxes, and Growth," Annals of Economics and Finance, Society for AEF, vol. 11(1), pages 73-94, May.
    8. Eisenring, Christoph, 1999. "Comparative dynamics in a health investment model," Journal of Health Economics, Elsevier, vol. 18(5), pages 653-658, October.
    9. Zon, Adriaan van & Muysken, Joan, 2003. "Health as a Principal Determinant of Economic Growth," Research Memorandum 024, Maastricht University, Maastricht Economic Research Institute on Innovation and Technology (MERIT).
    10. van Zon, Adriaan & Muysken, Joan, 2001. "Health and endogenous growth," Journal of Health Economics, Elsevier, vol. 20(2), pages 169-185, March.
    11. Wei-Bin Zhang, 2018. "Dynamic Interactions Between Health, Human Capital and Wealth," Academicus International Scientific Journal, Entrepreneurship Training Center Albania, issue 17, pages 122-145, March.
    12. Wei-Bin Zhang, 2018. "Economic Growth and Health Dynamics with Government Subsidies for Healthcare," Acta Oeconomica Pragensia, Prague University of Economics and Business, vol. 2018(3), pages 3-23.

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