Non-monotonic health behaviours – implications for individual health-related behaviour in a demand-for-health framework

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.

Optimal investment in health when lifetime is stochastic, or, rational agents do not often follow health recommendations

“…The notion that people make consumption and investment choices with some recognition of their health goes back to Grossman (1972). Even though his initial formulation focused on medical care goods and services, later extensions allowed for a broader variety of goods, services, and health-related behaviors, as in, for example, Muurinen (1982), Ehrlich and Chuma (1990), and Bolin and Lindgren (2016). Theoretical treatments that follow in this tradition but also incorporate the influence of individual health-related decisions on the probability of dying include Ehrlich (2000), Levy (2002), Dragone (2009), Caputo and Levy (2012), and Caputo and Dragone (2022).…”

Consumption and investment demand when health evolves stochastically

“…Most previous theoretical treatments of the demand-for-health model have examined open-loop solutions for the control variables in a deterministic setting, as in, e.g., Muurinen (1982), Ehrlich and Chuma (1990), Reid (1998), Eisenring (1999), Laporte and Ferguson (2007), Galama (2015), Laporte (2015), Strulik (2015), Bolin and Lindgren (2016), and Fu et al (2016).…”