On adaptation and the demand for health
Abstract:The purpose of this paper is to analyse the impacts of adaptation to failing health. This is done by integrating adaptation processes in a Grossman type of pure consumption model. Model simulations show that adaptation affects the health variables by lowering the incentives to invest in health, as well as smoothing the optimal health stock path over the life cycle. Whether or not the risk of mortality is an object of choice has important effects when studying adaptation, as well as for the joint development of the health variables.
Document Type: Research Article
Affiliations: 1: Norwegian Computing Center, P. O. Box 114 Blindern, 0314 Oslo, Norway 2: Institute of Health Management and Health Economics, University of Oslo, P. O. Box 1089 Blindern, 0317 Oslo, Norway 3: Ragnar Frisch Centre for Economic Research, Gaustadalléen 21, 0349 Oslo, Norway
Publication date: 2005-06-20