Substituting Leisure for Health Expenditure: A General Equilibrium-Based Empirical Investigation

Kevin Huang (), Hui He () and Sheng-ti Hung ()
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Sheng-ti Hung: University of Hawai''i at Manoa

No 13-00020, Vanderbilt University Department of Economics Working Papers from Vanderbilt University Department of Economics

Abstract: We develop a general equilibrium macroeconomic model with endogenous health accumulation, and we use the model's equilibrium condition to estimate the elasticity of substitution between medical care and leisure time in maintaining health, based on a cross-country panel dataset. Our econometric estimates imply that increasing health-enhancing leisure time may substantially reduce the nation's medical expenditure and help resolve its pressing fiscal uncertainty. Our study highlights the importance of several current nationwide campaigns aimed at improving national health status, from not only health but macroeconomic perspectives. Our study also provides a guidance to a growing macro-health literature in modeling health production.

Keywords: general equilibrium; macro-health; health care; leisure time; elasticity of substitution; fiscal uncertainty (search for similar items in EconPapers)
JEL-codes: E2 I1 (search for similar items in EconPapers)
Date: 2013-12-23
New Economics Papers: this item is included in nep-hea and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

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Working Paper: Substituting Leisure for Health Expenditure: A General Equilibrium-Based Empirical Investigation (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:van:wpaper:vuecon-sub-13-00020

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