Health and Economic Growth: Reconciling the Micro and Macro Evidence.

Economists use micro-based and macro-based approaches to assess the macroeconomic return to population health. The macro-based approach tends to yield estimates that are either negative and close to zero or positive and an order of magnitude larger than the range of estimates derived from the micro-based approach. This presents a micro-macro puzzle regarding the macroeconomic return to health. We reconcile the two approaches by controlling for the indirect effects of health on income per capita, which macro-based approaches usually include but micro-based approaches deliberately omit when isolating the direct income effects of health. Our results show that the macroeconomic return to health lies in the range of plausible microeconomic estimates, demonstrating that both approaches are in fact consistent with one another.

Anticipation of deteriorating health and information avoidance.

We integrate anticipatory utility and endogenous beliefs about future negative health shocks into a life-cycle model of physiological aging. Individuals care about their future utility derived from their health status and form endogenous beliefs about the probability of a negative health shock. We calibrate the model with data from gerontology and use the model to predict medical testing decisions of individuals. We find that anticipation in combination with endogenous beliefs provides a quantitatively strong motive to avoid medical testing for Huntington's disease, which explains the low testing rates found empirically. We also study the case of breast and ovarian cancer and provide an explanation for why testing rates depend on the individual's income when treatment is available.

The gender gap in mortality: How much is explained by behavior?

In developed countries, women are expected to live about 4-5 years longer than men. In this paper, we develop a novel approach to gauge the extent to which gender differences in longevity can be attributed to gender-specific preferences and health behavior. We set up a physiologically founded model of health deficit accumulation and calibrate it using recent insights from gerontology. From fitting life cycle health expenditure and life expectancy, we obtain estimates of the gender-specific preference parameters. We then perform the counterfactual experiment of endowing women with the preferences of men. In our benchmark scenario, this reduces the gender gap in life expectancy from 4.6 to 1.4 years. When we add gender-specific preferences for unhealthy consumption, the model can motivate up to 89 percent of the gender gap. Our theory offers also an economic explanation for why the gender gap declines with rising income.