Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/103879
Authors: 
Strulik, Holger
Year of Publication: 
2014
Series/Report no.: 
Discussion Papers, Center for European Governance and Economic Development Research 222
Abstract: 
This paper provides a closed-form solution for the health capital model of health demand. The results are exploited in order to prove analytically the comparative dynamics of the model. Results are derived for the so called pure investment model, the pure consumption model and a combination of both types of models. Given the plausible assumptions that (i) health declines with age and that (ii) the health capital stock at death is lower than the health capital stock needed for eternal life, it is shown that the optimal solution always implies eternal life. This outcome occurs independently from the initial stock of health, the impact of health on productivity, and the importance of health for utility and it is robust against the introduction of a finite age-dependent rate of health depreciation.
Subjects: 
longevity
health
health care demand
JEL: 
D91
J17
J26
I12
Document Type: 
Working Paper

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