Working Paper: NBER ID: w17789
Authors: Kristian Bolin; Bjorn Lindgren
Abstract: A number of behaviours influence health in a non-monotonic way. Physical activity and alcohol consumption, for instance, may be beneficial to one's health in moderate but detrimental in large quantities. We develop a demand-for-health framework that incorporates the feature of a physiologically optimal level. An individual may still choose a physiologically non-optimal level, because of the trade-off in his or her preferences for health versus other utility-affecting commodities. However, any deviation from the physiologically optimal level will be punished with respect to health. A set of steady-state comparative statics is derived regarding the effects on the demand for health and health-related behaviour, indicating that individuals react differently to exogenous changes, depending on the amount of the health-related behaviour they demand. We also show (a) that a steady-state equilibrium is a saddle-point and (b) that the physiologically optimal level may be a steady-state equilibrium for the individual. Our analysis suggests that general public-health policies may, to some extent, be counterproductive due to the responses induced in part of the population.
Keywords: health investments; demand-for-health; public health policy
JEL Codes: I12
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| physical activity (I12) | health outcomes (I14) |
| alcohol consumption (L66) | health outcomes (I14) |
| deviations from optimal health behavior (I12) | adverse health effects (I12) |
| public health policies (I18) | negative health outcomes (I12) |
| individual preferences for health vs. other commodities (D11) | demand for health (I11) |
| steady-state equilibrium of health-related behaviors (I12) | optimal health behavior (I12) |