Anticipation of deteriorating health and information avoidance
Johannes Schünemann (),
Holger Strulik () and
Timo Trimborn ()
No 365, Center for European, Governance and Economic Development Research Discussion Papers from University of Goettingen, Department of Economics
The anticipation of bad future events reduces currently experienced happiness and it may through this channel elicit detrimental behavioral responses. We explore this idea in the context of endogenous health and aging. We integrate physiological aging into a life-cycle model, calibrate it with data from gerontology, and analyze how the anticipation of a deteriorating state of health affects health spending, life expectancy, and the value of life. In counterfactual computational experiments we compare behavior and outcomes of anticipating and non-anticipating individuals and find that anticipation decreases lifetime utility, health investments, and longevity. We then use the model to contribute to the literature on information avoidance. We find that anticipation provides a strong motive to avoid medical testing even when the likelihood of developing a certain disease is high and the cost for the test is low.
Keywords: Health; Anticipation; Longevity; Health Behavior; Value of Life; Information Avoidance (search for similar items in EconPapers)
JEL-codes: D11 D91 I12 J17 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-age, nep-hap, nep-hea and nep-upt
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:cegedp:365
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