The health hump

Holger Strulik

No 263, University of Göttingen Working Papers in Economics from University of Goettingen, Department of Economics

Abstract: In this paper, I suggest a novel explanation for a hump-shaped ageconsumption profile, based on human aging. The model integrates health in the utility function and utilizes recent estimates on 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.

Keywords: health; aging; life-cycle consumption (search for similar items in EconPapers)
JEL-codes: D91 E21 I10 (search for similar items in EconPapers)
Date: 2015
New Economics Papers: this item is included in nep-evo, nep-hea, nep-mac and nep-upt
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Related works:
Journal Article: The Health Hump (2017)
Journal Article: THE HEALTH HUMP (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:cegedp:263

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