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A CLOSED-FORM SOLUTION FOR THE HEALTH CAPITAL MODEL*

Published online by Cambridge University Press:  09 September 2015

Holger Strulik
Holger Strulik*
Affiliation:
University of Goettingen, Goettingen, Germany
*
Email: holger.strulik@wiwi.uni-goettingen.de
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Abstract:

This paper provides a closed-form solution for the health capital model of health demand. The results are exploited in order to prove analytically the comparative dynamics of the model. Results are derived for the so-called pure investment model, the pure consumption model and a combination of both types of models. Given the plausible assumptions that (i) health declines with age and that (ii) the health capital stock at death is lower than the health capital stock needed for eternal life, it is shown that the optimal solution implies eternal life.

Keywords

LongevityAgingHealthHealth Care DemandD10D90I20
Type
Short Papers
Information
Journal of Demographic Economics , Volume 81 , Issue 3 , September 2015 , pp. 301 - 316
Copyright
Copyright © Université catholique de Louvain 2015 

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Footnotes

*

I would like to thank Carl-Johan Dalgaard, Gustav Feichtinger, Volker Grossmann, Ben Heijdra, Volker Meier, Johannes Schuenemann, Timo Trimborn, and four anonymous referees for helpful comments.

References

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