9/4 Treatment Choice

Choices in the Grossman model are made over two things:

How much we buy and how much time to spend

Would a wealthier person be more likely to invest in their health than a less wealthy person?

The wealthier person would be more likely to invest in their health because they have more money to buy things to produce health

Would a more educated person be more likely to invest in their health than a less educated person?

Yes, more education is an endowment and makes them better at producing health

When is not optimal to invest in health?

t → T, time currently is close to time of death

UH « UZ, utility of commodities far greater than utility of health

SH » It deteraiting health is far greater than rate of producing health

Pm » Px, price of medical care is much greater than price of commodities 

It = 0, ability to produce health is 0