We found a match
Your institution may have rights to this item. Sign in to continue.
- Title
Risk and uncertainty in health investment.
- Authors
Asano, Takao; Shibata, Akihisa
- Abstract
Extending the Grossman (J Polit Econ 80:223-255, 1972) model of health capital into a stochastic one, we analyze how the presence of Knightian uncertainty about the efficacy of health care affects the optimal health investment behavior of individuals. Using Gilboa and Schmeidler's (J Math Econ 18:141-153, 1989) model of maxmin expected utility (MMEU) with multiple priors, we show that an agent retains the initial level of health capital if the price of health care lies within a certain range. We also show that the no-investment range expands as the degree of Knightian uncertainty rises.
- Subjects
MEDICAL economics; MEDICAL care financing; INVESTMENT analysis; RISK assessment; UNCERTAINTY; MANAGEMENT
- Publication
European Journal of Health Economics, 2011, Vol 12, Issue 1, p79
- ISSN
1618-7598
- Publication type
Article
- DOI
10.1007/s10198-010-0238-2