Efficient Self-Protection and Progress in Curing-Technology
The direct medical costs associated with obesity, smoking, and other non-healthy habits are estimated to account for more than 20% of U.S. health spending. Hence, poor health choices induce significant aggregate shift in spending away from treating competing?non preventable?medical risks and from nonmedical consumption. Such a shift in spending distorts relative incentives to innovate in different sectors, through market-size effect. As consumers fail to internalize these aggregate-level externalities, private-prevention is generally inefficient. We show that private prevention is insufficient compared with social optimum, unless technological opportunities to develop cures for preventable diseases are sufficiently superior. Furthermore, under multiple preventable-risks, prevention efforts are biased in favor of the risk with higher potential for curing advances.
|Date of creation:||Apr 2013|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: (334) 844-4910
Fax: (334) 844-4615
Web page: http://cla.auburn.edu/economics/
More information through EDIRC
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.:
- Daron Acemoglu & Joshua Linn, 2004.
"Market Size in Innovation: Theory and Evidence from the Pharmaceutical Industry,"
The Quarterly Journal of Economics,
MIT Press, vol. 119(3), pages 1049-1090, August.
- Daron Acemoglu & Joshua Linn, 2003. "Market Size in Innovation: Theory and Evidence From the Pharmaceutical Industry," NBER Working Papers 10038, National Bureau of Economic Research, Inc.
- Daron Acemoglu & Joshua Linn, 2004. "Market Size in Innovation: Theory and Evidence from the Pharmaceutical Industry," Levine's Working Paper Archive 228400000000000002, David K. Levine.
- Amy Finkelstein, 2004. "Static and Dynamic Effects of Health Policy: Evidence From the Vaccine Industry," The Quarterly Journal of Economics, MIT Press, vol. 119(2), pages 527-564, May.
- Mikko Packalen & Jay Bhattacharya, 2010.
"The Other Ex-Ante Moral Hazard in Health,"
1015, University of Waterloo, Department of Economics, revised Dec 2010.
- Ehrlich, Isaac & Becker, Gary S, 1972. "Market Insurance, Self-Insurance, and Self-Protection," Journal of Political Economy, University of Chicago Press, vol. 80(4), pages 623-48, July-Aug..
- Peltzman, Sam, 1975. "The Effects of Automobile Safety Regulation," Journal of Political Economy, University of Chicago Press, vol. 83(4), pages 677-725, August.
- Cawley, John & Meyerhoefer, Chad, 2012.
"The medical care costs of obesity: An instrumental variables approach,"
Journal of Health Economics,
Elsevier, vol. 31(1), pages 219-230.
- John Cawley & Chad Meyerhoefer, 2010. "The Medical Care Costs of Obesity: An Instrumental Variables Approach," NBER Working Papers 16467, National Bureau of Economic Research, Inc.
- Tomas J. Philipson & William H. Dow & Xavier Sala-i-Martin, 1999. "Longevity Complementarities under Competing Risks," American Economic Review, American Economic Association, vol. 89(5), pages 1358-1371, December.
- Bhattacharya, Jay & Packalen, Mikko, 2011.
"Opportunities and benefits as determinants of the direction of scientific research,"
Journal of Health Economics,
Elsevier, vol. 30(4), pages 603-615, July.
- Mikko Packalen & Jay Bhattacharya, 2010. "Opportunities and Benefits as Determinants of the Direction of Scientific Research," Working Papers 1014, University of Waterloo, Department of Economics, revised Dec 2010.
- Tomas J. Philipson & Richard A. Posner, 2008. "Is the Obesity Epidemic a Public Health Problem? A Review of Zoltan J. Acs and Alan Lyles's Obesity, Business and Public Policy," Journal of Economic Literature, American Economic Association, vol. 46(4), pages 974-82, December.
- Ellis, Randall P. & Manning, Willard G., 2007. "Optimal health insurance for prevention and treatment," Journal of Health Economics, Elsevier, vol. 26(6), pages 1128-1150, December.
- Yin, Wesley, 2008. "Market incentives and pharmaceutical innovation," Journal of Health Economics, Elsevier, vol. 27(4), pages 1060-1077, July.
- repec:mpr:mprres:7163 is not listed on IDEAS
- Yaniv, Gideon & Rosin, Odelia & Tobol, Yossef, 2009. "Junk-food, home cooking, physical activity and obesity: The effect of the fat tax and the thin subsidy," Journal of Public Economics, Elsevier, vol. 93(5-6), pages 823-830, June.
When requesting a correction, please mention this item's handle: RePEc:abn:wpaper:auwp2013-07. 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: (Hyeongwoo Kim)
If references are entirely missing, you can add them using this form.