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Incentives and Choice in Health Care$
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Frank A. Sloan and Hirschel Kasper

Print publication date: 2008

Print ISBN-13: 9780262195775

Published to MIT Press Scholarship Online: August 2013

DOI: 10.7551/mitpress/9780262195775.001.0001

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Health Capital: Theory and Empirical Evidence

Health Capital: Theory and Empirical Evidence

(p.51) 3 Health Capital: Theory and Empirical Evidence
Incentives and Choice in Health Care

Donna Gilleskie

The MIT Press

This chapter describes the Grossman health capital model and its theoretical extensions, including its incorporation of the effects of uncertainty and application to the study of health capital and the role of incentives. It considers the various empirical applications of the model, including empirical studies of demand for medical care and other inputs affecting health, such as diet, exercise, and tobacco and drug use. It also outlines structural models of household decision making about health and health care and considers the use of medical care and absences from work during episodes of acute illness. Furthermore, the chapter discusses some applications of the structural approach to modeling: the use of mental health services during childhood; choices of prescription drugs when the effects of the drug can only be learned by trying it; and an investigation of annual smoking, exercise, alcohol consumption, and medical care use decisions over a lifetime. Finally, it highlights many of the difficulties encountered in empirical research on health behavior.

Keywords:   health care, Grossman health capital model, health capital, incentives, acute illness, mental health services, prescription drugs, smoking, exercise, health behavior

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