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Specification of the Health Production Function and its Behavioral Implications

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Listed:
  • Bolin, Kristian

    (Department of Economics, School of Business, Economics and Law, Göteborg University)

  • Caputo, Michael R

    (University of Central Florida)

Abstract

The health production function of the canonical health-capital model is generalized to allow the state of health to affect the total and marginal products of health investment. If the total and marginal products of health investment are nonincreasing functions of the state of health, then the solution of the generalized model is locally qualitatively identical to that of the canonical model. Moreover, in contrast to the canonical model, the generalized model is able to rationalize the cycling of the state of health and health investment observed in some individuals. The necessary conditions on the health production function for cyclical behavior are identified as well.

Suggested Citation

  • Bolin, Kristian & Caputo, Michael R, 2022. "Specification of the Health Production Function and its Behavioral Implications," Working Papers in Economics 821, University of Gothenburg, Department of Economics.
    • Handle: RePEc:hhs:gunwpe:0821
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    References listed on IDEAS

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    More about this item

    Keywords

    health investment; health production function; health stock; optimal control;
    All these keywords.

    JEL classification:

    • D15 - Microeconomics - - Household Behavior - - - Intertemporal Household Choice; Life Cycle Models and Saving
    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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