IDEAS home Printed from https://ideas.repec.org/p/iza/izadps/dp5728.html
   My bibliography  Save this paper

The Economics of Risky Health Behaviors

Author

Listed:
  • Cawley, John

    () (Cornell University)

  • Ruhm, Christopher J.

    () (University of Virginia)

Abstract

Risky health behaviors such as smoking, drinking alcohol, drug use, unprotected sex, and poor diets and sedentary lifestyles (leading to obesity) are a major source of preventable deaths. This chapter overviews the theoretical frameworks for, and empirical evidence on, the economics of risky health behaviors. It describes traditional economic approaches emphasizing utility maximization that, under certain assumptions, result in Pareto-optimal outcomes and a limited role for policy interventions. It also details nontraditional models (e.g. involving hyperbolic time discounting or bounded rationality) that even without market imperfections can result in suboptimal outcomes for which government intervention has greater potential to increase social welfare. The chapter summarizes the literature on the consequences of risky health behaviors for economic outcomes such as medical care costs, educational attainment, employment, wages, and crime. It also reviews the research on policies and strategies with the potential to modify risky health behaviors, such as taxes or subsidies, cash incentives, restrictions on purchase and use, providing information and restricting advertising. The chapter concludes with suggestions for future research.

Suggested Citation

  • Cawley, John & Ruhm, Christopher J., 2011. "The Economics of Risky Health Behaviors," IZA Discussion Papers 5728, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp5728
    as

    Download full text from publisher

    File URL: http://ftp.iza.org/dp5728.pdf
    Download Restriction: no

    Other versions of this item:

    More about this item

    Keywords

    income; health behaviors; alcohol; tobacco; smoking; drugs; obesity; diet; food; physical activity; public health; public policy; taxation; subsidies; addiction; externalities; advertising; information; behavioral economics; neuroeconomics; human capital; education; prices; sex; time preference; peers; bounded rationality; medical costs; employment; wages; crime; hyperbolic discounting;

    JEL classification:

    • I1 - Health, Education, and Welfare - - Health
    • I20 - Health, Education, and Welfare - - Education - - - General
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • D1 - Microeconomics - - Household Behavior
    • D6 - Microeconomics - - Welfare Economics
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • D87 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Neuroeconomics
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • J1 - Labor and Demographic Economics - - Demographic Economics
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy
    • I24 - Health, Education, and Welfare - - Education - - - Education and Inequality

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:iza:izadps:dp5728. 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: (Mark Fallak). General contact details of provider: http://www.iza.org .

    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 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.