A Model of the Demand for Longevity and the Value of Life Extension
State University of New York at Buffalo - Department of Economics; National Bureau of Economic Research (NBER); University of Chicago - University of Chicago Press; Institute for the Study of Labor (IZA)
Hitotsubashi University - Institute of Innovation Research
Journal of Political Economy, Vol. 98, No. 4, pp. 761-82, August 1990
We specify a demand function for longevity, or quantity of life, along with corresponding demand functions for indicators of quality of life and a value-of-health and life extension function. We show that the demand for health must be derived in conjunction with that for longevity and the related consumption plan, and that all choices depend on initial individual endowments and terminal conditions. Our comparative dynamics predictions indicate that optimal health and longevity are increasing functions of endowed wealth rather than, necessarily, current income; that improvements in opportunities to produce health can accentuate the differences between endowed health and attained longevity levels; and that the value individuals ascribe to their health may be increasing over a good portion of their life cycle. We use this model to analyze observed empirical variations in levels and trends of life expectancy and in exposure to health risks across different population groups.
Number of Pages in PDF File: 23Accepted Paper Series
Date posted: February 7, 2007
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