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How Does Health Status Affect Marginal Utility of Consumption? Evidence from China

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  • Xiaoyu Wang

    (National School of Development, Peking University, Beijing 100871, China)

  • Chunan Wang

    (School of Economics and Management, Beihang University, Beijing 100191, China)

Abstract

This paper investigates how the deteriorating health status of an individual affects the marginal utility of non-medical consumption in China. By using 2011, 2013 and 2015 China Health and Retirement Longitudinal Study (CHARLS) data, we find that when the number of chronic diseases increases one standard deviation, the marginal utility of consumption will increase by 16.0% and 20.0% for samples of the middle-aged and elderly individuals over 50 and 65 years of age, respectively. This result is to some extent contrary to the findings from the US. Different economic development stages, intergenerational norms and bequest motives may be reasons for these contrasting patterns between China and the US.

Suggested Citation

  • Xiaoyu Wang & Chunan Wang, 2020. "How Does Health Status Affect Marginal Utility of Consumption? Evidence from China," IJERPH, MDPI, vol. 17(7), pages 1-20, March.
    • Handle: RePEc:gam:jijerp:v:17:y:2020:i:7:p:2234-:d:337381
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