Non-monotonic health behaviours - implications for individual health-related behaviour in a demand-for-health framework
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Date
2014-03
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Abstract
A number of behaviours influence health in a non-monotonic way. Physical activity and alcohol
consumption, for instance, may be beneficial to one’s health in moderate but detrimental in large
quantities. We develop a demand-for-health framework that incorporates the feature of a
physiologically optimal level. An individual may still choose a physiologically non-optimal level,
because of the trade-off in his or her preferences for health versus other utility-affecting commodities. However, any deviation from the physiologically optimal level will be punished with respect to health. A set of steady-state comparative statics is derived regarding the effects on the demand for health and health-related behaviour, indicating that individuals will react differently to exogenous changes, depending on the amount of the health-related behaviour they demand. We also show (a) that a steady-state equilibrium is a saddle-point and (b) that the physiologically optimal level may be a steady-state equilibrium for the individual. Our analysis suggests that general public-health policies may, to some extent, be counterproductive due to the
responses induced in parts of the population.
Description
JEL: I12
Keywords
human capital, Grossman model, non-monotonic health investments, health, steadystate and stable equilibria