 Optimal Investment in Health when Lifetime is Stochastic, or, Rational Agents do not Often Follow Health Agency RecommendationsKristian Bolin and Michael Caputo No 734, Working Papers in Economics from University of Gothenburg, Department of Economics Abstract: A health-capital model is contemplated which accounts for the consumption of many goods, a stock of health and investment in it, as well as an agent’s random lifetime and accumulation of wealth. It is shown that if an agent maximizes the expected discounted value of lifetime utility, or if an agent maximizes the expected value of their lifetime, then an agent does not follow the health-investment policy that minimizes the conditional probability of dying at each point in time, in general. What is more, simple and intuitive sufficient, and necessary and sufficient, conditions are identified whereby such agents investment more or less in their health than said policy. Keywords: health capital; health investment; optimal control; random lifetime (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:hhs:gunwpe:0734 Ordering information: This working paper can be ordered from Access Statistics for this paper More papers in Working Papers in Economics from University of Gothenburg, Department of Economics Department of Economics, School of Business, Economics and Law, University of Gothenburg, Box 640, SE 405 30 GÖTEBORG, Sweden. Contact information at EDIRC. |
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