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Prudence and optimal prevention for health risks

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  • Christophe Courbage
  • Béatrice Rey

Abstract

Empirical evidence suggests the existence of a positive relationship between fear of sickness (FS) – as measured by the level of future utility lost when sickness occurs – and the level of effort to prevent the occurrence of sickness. By looking theoretically at this issue, we develop new results on the determinants of optimal prevention for health risks. In particular, we show that a sufficient condition to pursue more prevention for an individual with a higher FS than another is to have lower prudence in Kimball's (1990) sense, whatever the distribution of risk. These findings reinforce the role of prudence as a main determinant of the optimal level of prevention. Copyright © 2006 John Wiley & Sons, Ltd.

Suggested Citation

  • Christophe Courbage & Béatrice Rey, 2006. "Prudence and optimal prevention for health risks," Health Economics, John Wiley & Sons, Ltd., vol. 15(12), pages 1323-1327, December.
    • Handle: RePEc:wly:hlthec:v:15:y:2006:i:12:p:1323-1327
    DOI: 10.1002/hec.1138
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    References listed on IDEAS

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