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On adaptation, life-extension possibilities and the demand for health

Author

Listed:
  • Gjerde, Jon

    (Norwegian Computing Center)

  • Grepperud, Sverre

    () (Institute of Health Management and Health Economics)

  • Kverndokk, Snorre

    () (Ragnar Frisch Centre for Economic Research)

Abstract

A good health is important for having a good life. This is supported by surveys on happiness. However, at least after a certain age, the health state deteriorates naturally over time due to ageing. Nevertheless, research reports show that old people in average are satisfied with their health conditions. This and other empirical evidence indicate that individuals adapt to poorer health conditions. But how will this adaptation influence the demand for health services? Gjerde, Grepperud and Kverndokk will in this paper analyse the impacts of adaptation to a falling health state on the demand for health and medical care. This is done by integrating adaptation processes in the pure consumption model of Grossman. The authors will modify the consumption-model in another direction by introducing an uncertain lifetime. Model simulations show that adaptation affects the health variables by lowering the incentives to invest in health, as well as smoothening the optimal health stock path over the life cycle. Whether or not the risk of mortality is an object of choice has important effects on the joint development of the health variables.

Suggested Citation

  • Gjerde, Jon & Grepperud, Sverre & Kverndokk, Snorre, 2009. "On adaptation, life-extension possibilities and the demand for health," HERO On line Working Paper Series 2001:7, Oslo University, Health Economics Research Programme.
  • Handle: RePEc:hhs:oslohe:2001_007
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    File URL: http://www.hero.uio.no/publicat/2001/HERO2001_7.pdf
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    References listed on IDEAS

    as
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    Citations

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    Cited by:

    1. Azomahou, Theophile & Diene, Bity & Soete, Luc, 2009. "The role of consumption and the financing of health investment under epidemic shocks," MERIT Working Papers 006, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    2. Carbone, Jared & Kverndokk, Snorre & Røgeberg, Ole-Jørgen, 2009. "Smoking and Health Investments: Impacts of Health Adaptation and Damage Reversibility," HERO On line Working Paper Series 2003:12, Oslo University, Health Economics Research Programme.
    3. Azomahou, Theophile & Soete, Luc & Diene, Bity & Diene, Mbaye, 2012. "Optimal health investment with separable and non-separable preferences," MERIT Working Papers 047, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).

    More about this item

    Keywords

    Grossman; Demand for health; Adaptation; Life extension; Ageing.;

    JEL classification:

    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior

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