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Anticipation of deteriorating health and information avoidance

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  • Schünemann, Johannes
  • Strulik, Holger
  • Trimborn, Timo

Abstract

The anticipation of bad future events reduces currently experienced happiness and it may through this channel elicit detrimental behavioral responses. We explore this idea in the context of endogenous health and aging. We integrate physiological aging into a life-cycle model, calibrate it with data from gerontology, and analyze how the anticipation of a deteriorating state of health affects health spending, life expectancy, and the value of life. In counterfactual computational experiments we compare behavior and outcomes of anticipating and non-anticipating individuals and find that anticipation decreases lifetime utility, health investments, and longevity. We then use the model to contribute to the literature on information avoidance. We find that anticipation provides a strong motive to avoid medical testing even when the likelihood of developing a certain disease is high and the cost for the test is low.

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  • Schünemann, Johannes & Strulik, Holger & Trimborn, Timo, 2019. "Anticipation of deteriorating health and information avoidance," University of Göttingen Working Papers in Economics 365, University of Goettingen, Department of Economics.
    • Handle: RePEc:zbw:cegedp:365
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    1. > Economics of Welfare > Health Economics > Economics of Pandemics > Policy responses > Behavioral

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    Cited by:

    1. 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.
    2. 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).
    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; Value of Life; 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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