IDEAS home Printed from https://ideas.repec.org/p/isu/genstf/201209240700001083.html

A dynamic efficiency rationale for public investment in the health of the young

Author

Listed:
  • Andersen, Torben M.
  • Bhattacharya, Joydeep

Abstract

In this paper, we assume away standard distributional and static-efficiency arguments for public health, and instead, seek a dynamic efficiency rationale. We study a lifecycle model wherein young agents make health investments to reduce mortality risk. We identify a welfare rationale for public health under dynamic efficiency and exogenous mortality even when private and public investments are perfect substitutes. If health investment reduces mortality risk but individuals do not internalize its effect on the life-annuity interest rate, the Philipson-Becker effect emerges; when the young are net borrowers, it works together with dynamic efficiency to support a role for public health.

Suggested Citation

  • Andersen, Torben M. & Bhattacharya, Joydeep, 2012. "A dynamic efficiency rationale for public investment in the health of the young," ISU General Staff Papers 201209240700001083, Iowa State University, Department of Economics.
    • Handle: RePEc:isu:genstf:201209240700001083
    as

    Download full text from publisher

    File URL: https://dr.lib.iastate.edu/server/api/core/bitstreams/24f7a4a8-6081-49bd-9abb-1c257e460553/content
    Download Restriction: no
    ---><---

    Other versions of this item:

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Torben Andersen & Mikkel Hermansen, 2014. "Durable consumption, saving and retirement," Journal of Population Economics, Springer;European Society for Population Economics, vol. 27(3), pages 825-840, July.
    2. Gylfi Zoega & Marias H. Gestsson, 2018. "Longevity and Companionship in an Overlapping-Generations Model," Birkbeck Working Papers in Economics and Finance 1811, Birkbeck, Department of Economics, Mathematics & Statistics.
    3. Luca Marchiori & Olivier Pierrard, 2023. "Health subsidies, prevention and welfare," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 25(6), pages 1304-1336, December.

    More about this item

    JEL classification:

    • E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:isu:genstf:201209240700001083. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Curtis Balmer (email available below). General contact details of provider: https://edirc.repec.org/data/deiasus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.