A Theory of Health Investment Under Competing Mortality Risks
22 Pages Posted: 2 Apr 2002
Date Written: February 2002
Abstract
In this paper we present a theory of health investment when there are multiple causes of death. Since there are several risks "competing" for one's life, the health investments in avoiding different causes of death are not independent in general. We analyze the optimal investment rules and the comparative statics. In particular, we search for the conditions that make such health investments normal goods, non-Giffen goods, gross complements to one another, and have a positive risk aversion effect. If the proposed conditions fail, then some health investments may become net substitutes, or even gross substitutes to one another.
Keywords: Competing Risks, Complementarity, Quantity and Quality of Life, Dominant Diagonal Matrix
JEL Classification: I11, I12
Suggested Citation: Suggested Citation
Do you have a job opening that you would like to promote on SSRN?
Recommended Papers
-
Participation in Illegitimate Activities: A Theoretical and Empirical Investigation
-
Market Insurance, Self-Insurance, and Self-Protection
By Isaac Ehrlich and Gary S. Becker
-
The Deterrent Effect of Capital Punishment: A Question of Life and Death
-
Altruism and Envy in Contests: An Evolutionarily Stable Symbiosis
-
Private Provision of Public Goods: Incentives for Donations
By Karen Pittel and Dirk T. G. Rübbelke
-
Some Reflections on the Transaction Cost Theory of Nonprofit Organisation
-
Valuation of Self-Insurance and Self-Protection Under Ambiguity: Experimental Evidence