The family as producer of health — an extended grossman model

Child health and the income gradient: Evidence from Australia

“…Exogenous shocks thus may also a ect a consumer's demand for health and the production of gross investments in health. Jacobson (2000) extended the model of Grossman (1972) by taking the family as the production unit. In her model, every individual in the family is both the producer of his or her own own health as well as the health of other family members.…”

“…In this framework, the income of all family members is used in the production of the health capital of each member of the family. Thus, in one of her models, Jacobson (2000) considers a family unit that consists of a father, a mother and a child. In this model, the child is a passive participant in the production of its own health.…”

“…Following these extensions, and in the vein of Schultz (1982, 1983), Rosenzweig and Wolpin (1988) and Jacobson (2000), suppose that the utility function for a family at time t can be written as…”

The Grossman model after 40 years

“…A shortcoming of previous formulations is that the individual had been considered in isolation, whereas decision making with regard to health [and the third asset in question, wisdom (education), one might note] often occurs within the family. Jacobson [10] introduced the corresponding combined production possibility frontier, whereas Bolin et al [2] explored the possibility of strategic interaction between spouses with the possibility of one free-riding on the other.…”

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

“…Since its introduction, the demand-for-health model has been extended in various ways; incorporating risk and uncertainty Wagstaff, 1987, 1990;Selden, 1993;Chang, 1996;Liljas, 1998Liljas, , 2000Picone et al, 1998;Asano and Shibata, 2011), the family as producer of health (Jacobson, 2000;Bolin et al, 2001Bolin et al, , 2002b, the employer as producer of health (Bolin et al, 2002c), social capital (Bolin et al, 2003), healthy and unhealthy consumption (Forster, 2001), decreasing returns to scale in the production of health investment (Ehrlich and Chuma, 1990;Galama, 2011), imperfect financial markets (Liljas, 2000(Liljas, , 2002, and allowing for corner solutions (Galama and Kapteyn, 2011). To our knowledge, however, the effect on the demand for health and health investments of the double-facetted nature of individual behaviours with physiologically determined optimal levels as regards health and negative or positive health effects, depending on the level of activity, has never been analysed.…”