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Anticipation of Deteriorating Health and Information Avoidance

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  • Johannes Schünemann

    (University of Fribourg, Department of Economics)

  • Holger Strulik

    (University of Goettingen, Department of Economics)

  • Timo Trimborn

    (Department of Economics and Business Economics, Aarhus University)

Abstract

We integrate anticipatory utility and endogenous beliefs about future negative health shocks into a life-cycle model of physiological aging. Individuals care about their future utility derived from their health status and form endogenous beliefs about the probability of a negative health shock. We calibrate the model with data from gerontology and use the model to predict medical testing decisions of individuals. We find that anticipation in combination with endogenous beliefs provides a quantitatively strong motive to avoid medical testing for Huntington's disease which explains the low testing rates found empirically. We also study the case of breast and ovarian cancer and provide an explanation for why testing rates depend on the individual's income when treatment is available.

Suggested Citation

  • Johannes Schünemann & Holger Strulik & Timo Trimborn, 2020. "Anticipation of Deteriorating Health and Information Avoidance," Economics Working Papers 2020-14, Department of Economics and Business Economics, Aarhus University.
    • Handle: RePEc:aah:aarhec:2020-14
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    Cited by:

    1. Schünemann, Johannes & Strulik, Holger & Trimborn, Timo, 2022. "Optimal demand for medical and long-term care," The Journal of the Economics of Ageing, Elsevier, vol. 23(C).
    2. Johannes Schünemann & Holger Strulik & Timo Trimborn, 2023. "Anticipation of Future Consumption, Excessive Savings, and Long-Run Growth," Economics Working Papers 2023-10, Department of Economics and Business Economics, Aarhus University.
    3. Peter Zweifel, 2022. "Health economics explained through six questions and answers," Economic Affairs, Wiley Blackwell, vol. 42(1), pages 50-69, February.

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    More about this item

    Keywords

    Health; Anticipation; Longevity; Health behavior; Beliefs; Information avoidance;
    All these keywords.

    JEL classification:

    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • J17 - Labor and Demographic Economics - - Demographic Economics - - - Value of Life; Foregone Income

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