Smoking and Health Investments: Impacts of Health Adaptation and Damage Reversibility
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Forfattere:
Carbone, J., S. Kverndokk og O. J. Røgeberg
År:
2003
Referanse:
HERO Skrifter
Nummer i serie: 12
Sammendrag (engelsk)
In the present paper we examine how different sets of beliefs about the health effects of smoking would influence a rational smoker. By embedding the rational addiction theory in a Grossman model of health investment modified to take account of psychological adaptation effects, we present a model of a rational addict that allows us to explicitly specify beliefs about a direct and indirect effect on both death risk and utility. This allows us to study how a rational addict would smoke with different beliefs of cancer risks, and with or without the well-documented ability to adapt to health changes. Numerical simulation results illustrate a number of different incentives that influence the smoking paths and health investments under the various beliefs, and suggests that beliefs have different impacts at different ages, providing a richer set of dynamics than might initially be expected.
Nøkkelord:
Rational addiction; Demand for health; Adaptation; Risk; Life extension
JEL:
C61; D91; I12
Prosjekt info:
Oppdragsgiver: Norges forskningsrådOppdragsgivers prosjektnr.:
Frisch prosjekt: 4101 - Økonomi og helse
ISBN:
82-7756-116-4
Kontakt:
snorre.kverndokk@frisch.uio.no
Finansiering:
Norwegian Research Council
