Longevity, genes and efforts: An optimal taxation approach to prevention

Marie-Louise Leroux, Pierre Pestieau and Gregory Ponthiere

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Abstract: This paper applies the analytical tools of optimal taxation theory to the design of the optimal subsidy on preventive behaviours, in an economy where longevity varies across agents, and depends on preventive expenditures and on longevity genes. Public intervention can be here justified on three grounds: corrections for misperceptions of the survival process and for externalities related to individual preventive behaviour, and redistribution across both earnings and genetic dimensions. The optimal subsidy on preventive expenditures is shown to depend on the combined impacts of misperception, externalities and self-selection. It is generally optimal to subsidize preventive efforts to an extent depending on the degree of individual myopia, on how productivity and genes are correlated, and on the complementarity of genes and preventive efforts in the survival function.

Keywords: Genetic background; Misperception; Optimal taxation; Prevention; Survival prospects (search for similar items in EconPapers)
Date: 2011-01
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Citations: View citations in EconPapers (11)

Published in Journal of Health Economics, 2011, 30 (1), pp.62-76. ⟨10.1016/j.jhealeco.2010.10.003⟩

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Journal Article: Longevity, genes and efforts: An optimal taxation approach to prevention (2011)
Working Paper: Longevity, genes and efforts: an optimal taxation approach to prevention (2011)
Working Paper: Longevity, genes and efforts: An optimal taxation approach to prevention (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:halshs-00754568

DOI: 10.1016/j.jhealeco.2010.10.003

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