Private and Public Health Investment Decisions

Manoj Atolia (), Chris Papageorgiou () and Stephen J Turnovsky

MPRA Paper from University Library of Munich, Germany

Abstract: In recent years, there has been an explosive increase in the demand for health products and services by people all around the globe, and particularly in advanced economies. Aiming to enhance longevity but also improve quality of life, individual consumption of pharmaceutical products and services has risen exponentially since the early 1980s. This paper develops a model in which agents invest part of their resources in medical products and time in physical exercise to enhance their health status. In the first part of the paper, we study the steady state and transitional dynamics of the model with special emphasis on the effects of health decisions on aggregate outcomes. In the second part, we explore how public health policies may alter private economic decisions that promote healthier and more productive lives.

Keywords: Private and public health investments; endogenous discounting of the rate of time preference; neoclassical growth model; health policy. (search for similar items in EconPapers)
JEL-codes: O16 O24 O38 O43 (search for similar items in EconPapers)
Date: 2017-06
New Economics Papers: this item is included in nep-age and nep-hea
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