The meaning of death: some simulations of a model of healthy and unhealthy consumption

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Simulations of a model of healthy and unhealthy consumption are used to investigate the impact of various terminal conditions on life-span, pathways of health-related consumption and health. A model in which life-span and the 'death' stock of health are fixed is compared to versions in which (i) the 'death' stock of health is freely chosen; (ii) life-span is freely chosen; (iii) both the 'death' stock of health and life-span are freely chosen. The choice of terminal conditions has a striking impact on optimal plans. Results are discussed with reference to the existing demand for health literature and illustrate the application of iterative processes to determine optimal life-span, the role played by the marginal value of health capital in determining optimal plans, and the importance of checking the second-order conditions for the optimal choice of life-span. (C) 2001 Elsevier Science B.V. All rights reserved.

Original languageEnglish
Pages (from-to)613-638
Number of pages26
JournalJournal of Health Economics
Issue number4
Publication statusPublished - Jul 2001


  • the demand for health
  • optimal life-span
  • healthy and unhealthy consumption
  • terminal and transversality conditions
  • LIFE

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