The utility of health and wealth

Moshe Levy*, Adi Rizansky Nir

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

23 Scopus citations

Abstract

Tradeoffs between health and wealth are among the most important decisions individuals make, and are central to social and economic policy. Yet, only a few studies have investigated the utility of health and wealth empirically. This paper investigates this utility function both theoretically and empirically. We conduct detailed personal interviews with 180 cancer patients, and also obtain questionnaires from 132 diabetes patients. We find strong support for the utility function U(. h, w). =. h·. log(. w), where h denotes health and w denotes wealth.

Original languageAmerican English
Pages (from-to)379-392
Number of pages14
JournalJournal of Health Economics
Volume31
Issue number2
DOIs
StatePublished - Mar 2012

Bibliographical note

Funding Information:
We are grateful to Tony Culyer, the Editor, and to the two anonymous referees for their very helpful comments and suggestions. We thank the Zagagi Fund for financial support.

Keywords

  • Health
  • Logarithmic preference
  • Utility
  • Wealth

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