THE HEALTH HUMP

Holger Strulik

Journal of Demographic Economics, 2017, vol. 83, issue 2, 245-258

Abstract: In this paper, I suggest a novel explanation for a hump-shaped age-consumption profile, based on human aging. The model integrates health in the utility function and utilizes recent estimates of the effects of health on the marginal utility of consumption. The parsimonious model has a closed-form solution for the age of peak consumption and the consumption level at that age relative to initial consumption. A calibration of the model with data from gerontology produces an empirically plausible hump in consumption.

Date: 2017
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Journal Article: The Health Hump (2017)
Working Paper: The health hump (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:cup:demeco:v:83:y:2017:i:2:p:245-258_4

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