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The Health Hump

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  • Strulik, Holger

Abstract

In this paper, I suggest a novel explanation for a hump-shaped age-consumption profile, based on human aging. The model integrates health in the utility function and utilizes recent estimates of the effects of health on the marginal utility of consumption. The parsimonious model has a closed-form solution for the age of peak consumption and the consumption level at that age relative to initial consumption. A calibration of the model with data from gerontology produces an empirically plausible hump in consumption.

Suggested Citation

  • Strulik, Holger, 2017. "The Health Hump," Journal of Demographic Economics, Cambridge University Press, vol. 83(2), pages 245-258, June.
    • Handle: RePEc:cup:demeco:v:83:y:2017:i:2:p:245-258_4
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    Citations

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    Cited by:

    1. Strulik, Holger & Trimborn, Timo, 2018. "Hyperbolic discounting can be good for your health," Journal of Economic Psychology, Elsevier, vol. 69(C), pages 44-57.
    2. Leonid V Azarnert, 2020. "Health capital provision and human capital accumulation," Oxford Economic Papers, Oxford University Press, vol. 72(3), pages 633-650.
    3. Dalgaard, Carl-Johan & Hansen, Casper Worm & Strulik, Holger, 2018. "Physiological Aging around the World and Economic Growth," CAGE Online Working Paper Series 375, Competitive Advantage in the Global Economy (CAGE).
    4. Carl-Johan Dalgaard & Casper Worm Hansen & Holger Strulik, 2017. "Accounting for Fetal Origins: Health Capital vs. Health Deficits," Discussion Papers 17-11, University of Copenhagen. Department of Economics.
    5. Strulik, Holger & Werner, Katharina, 2021. "Time-inconsistent health behavior and its impact on aging and longevity," Journal of Health Economics, Elsevier, vol. 76(C).
    6. Schünemann, Johannes & Strulik, Holger & Trimborn, Timo, 2017. "The gender gap in mortality: How much is explained by behavior?," Journal of Health Economics, Elsevier, vol. 54(C), pages 79-90.
    7. Schünemann, Johannes & Strulik, Holger & Trimborn, Timo, 2017. "Going from bad to worse: Adaptation to poor health health spending, longevity, and the value of life," Journal of Economic Behavior & Organization, Elsevier, vol. 140(C), pages 130-146.
    8. Strulik, Holger, 2018. "The return to education in terms of wealth and health," The Journal of the Economics of Ageing, Elsevier, vol. 12(C), pages 1-14.

    More about this item

    JEL classification:

    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • I10 - Health, Education, and Welfare - - Health - - - General

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