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The public finance of healthy behavior

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  • Robert Rosenman

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Abstract

Lifestyle can often affect the likelihood an individual will have a future illness. Subsidies often mitigate the consequences of poor lifestyle choices. In this paper we explore tax-subsidy policies that lower the consequences of incurring a non-infectious disease. We find that a funding mechanism consistent with current US policy lowers the investment in healthy lifestyles by both the wealthy, who pay taxes, and the poor, who receive subsidies. We also explore alternative policy interventions such as investing in research to lessen the impact or probability of the disease if an individual gets sick.
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Suggested Citation

  • Robert Rosenman, 2011. "The public finance of healthy behavior," Public Choice, Springer, vol. 147(1), pages 173-188, April.
  • Handle: RePEc:kap:pubcho:v:147:y:2011:i:1:p:173-188
    DOI: 10.1007/s11127-010-9611-z
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    References listed on IDEAS

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    1. McClellan, Mark & Skinner, Jonathan, 2006. "The incidence of Medicare," Journal of Public Economics, Elsevier, vol. 90(1-2), pages 257-276, January.
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    5. Komlos, John & Smith, Patricia K. & Bogin, Barry, 2003. "Obesity and the Rate of Time Preference: Is there a Connection?," Discussion Papers in Economics 60, University of Munich, Department of Economics.
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    7. Grossman, Michael, 1972. "On the Concept of Health Capital and the Demand for Health," Journal of Political Economy, University of Chicago Press, vol. 80(2), pages 223-255, March-Apr.
    8. Samuel H. Preston & Jessica Y. Ho, 2009. "Low Life Expectancy in the United States: Is the Health Care System at Fault?," NBER Working Papers 15213, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Lydia Lawless & Andreas Drichoutis & Rodolfo Nayga, 2013. "Time preferences and health behaviour: a review," Agricultural and Food Economics, Springer;Italian Society of Agricultural Economics (SIDEA), vol. 1(1), pages 1-19, December.
    2. repec:spr:agfoec:v:1:y:2013:i:1:p:1-19 is not listed on IDEAS

    More about this item

    Keywords

    Lifestyle; Health; Policy; Taxes; Subsidies; I1; H2; H4;

    JEL classification:

    • I1 - Health, Education, and Welfare - - Health
    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • H4 - Public Economics - - Publicly Provided Goods

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