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Human Health and Aging over an Infinite Time Horizon

Listed author(s):
  • D. Dragone
  • H. Strulik

Although death occurs with certainty, the time of death is uncertain. In this paper we build on this conceptualization and show that, although life ends at some point in time, human life can be meaningfully conceptualized as a strive for immortality that is never reached. We consider an intertemporal problem where health investments and consumption choices are made, taking into account that mortality depends on environmental factors, which are not controlled by the agent, and the agent's health condition, which is endogenous to lifestyle and health behavior. Formally, the infinite horizon approach has the advantage that adjustment dynamics to the steady state (i.e. human aging) can be discussed analytically. We explore the determinants of health deficits in this framework and show how individuals choose consumption and health expenditure over their lifetime in order to slow down (biological) aging. We compute analytically the impulse response functions for unexpected parameter changes. Specifically, we investigate how higher prices for medical goods and advancing medical technology affect individual behavior and health deficit accumulation.

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Paper provided by Dipartimento Scienze Economiche, Universita' di Bologna in its series Working Papers with number wp1104.

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Date of creation: Jun 2017
Handle: RePEc:bol:bodewp:wp1104
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  1. Erosa, Andres & Gervais, Martin, 2002. "Optimal Taxation in Life-Cycle Economies," Journal of Economic Theory, Elsevier, vol. 105(2), pages 338-369, August.
  2. D. Dragone & P. Vanin, 2015. "Price Effect in the Short and in the Long Run," Working Papers wp1040, Dipartimento Scienze Economiche, Universita' di Bologna.
  3. Robert E. Hall & Charles I. Jones, 2007. "The Value of Life and the Rise in Health Spending," The Quarterly Journal of Economics, Oxford University Press, vol. 122(1), pages 39-72.
  4. Kuhn, Michael & Wrzaczek, Stefan & Prskawetz, Alexia & Feichtinger, Gustav, 2015. "Optimal choice of health and retirement in a life-cycle model," Journal of Economic Theory, Elsevier, vol. 158(PA), pages 186-212.
  5. Holger Strulik & Sebastian Vollmer, 2013. "Long-run trends of human aging and longevity," Journal of Population Economics, Springer;European Society for Population Economics, vol. 26(4), pages 1303-1323, October.
  6. Heckman, James J, 1976. "A Life-Cycle Model of Earnings, Learning, and Consumption," Journal of Political Economy, University of Chicago Press, vol. 84(4), pages 11-44, August.
  7. Becker, Gary S & Murphy, Kevin M, 1988. "A Theory of Rational Addiction," Journal of Political Economy, University of Chicago Press, vol. 96(4), pages 675-700, August.
  8. Holger STRULIK, 2015. "A Closed-form Solution for the Health Capital Model," JODE - Journal of Demographic Economics, Cambridge University Press, vol. 81(3), pages 301-316, September.
  9. Ehrlich, Isaac & Chuma, Hiroyuki, 1990. "A Model of the Demand for Longevity and the Value of Life Extension," Journal of Political Economy, University of Chicago Press, vol. 98(4), pages 761-782, August.
  10. Carl-Johan Dalgaard & Holger Strulik, 2014. "Optimal Aging And Death: Understanding The Preston Curve," Journal of the European Economic Association, European Economic Association, vol. 12(3), pages 672-701, 06.
  11. 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.
  12. Menahem E. Yaari, 1965. "Uncertain Lifetime, Life Insurance, and the Theory of the Consumer," Review of Economic Studies, Oxford University Press, vol. 32(2), pages 137-150.
  13. Michael R. Caputo, 1990. "Comparative Dynamics via Envelope Methods in Variational Calculus," Review of Economic Studies, Oxford University Press, vol. 57(4), pages 689-697.
  14. Heckman, James J, 1974. "Life Cycle Consumption and Labor Supply: An Explanation of the Relationship Between Income and Consumption Over the Life Cycle," American Economic Review, American Economic Association, vol. 64(1), pages 188-194, March.
  15. Schünemann, Johannes & Strulik, Holger & Trimborn, Timo, 2016. "The gender gap in mortality: How much is explained by behavior?," ECON WPS - Vienna University of Technology Working Papers in Economic Theory and Policy 05/2016, Vienna University of Technology, Institute for Mathematical Methods in Economics, Research Group Economics (ECON).
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