Closing down the shop: Optimal health and wealth dynamics near the end of life

Details

Serval ID
serval:BIB_4612AC09703E
Type
Article: article from journal or magazin.
Collection
Publications
Institution
Title
Closing down the shop: Optimal health and wealth dynamics near the end of life
Journal
Health Economics
Author(s)
Hugonnier Julien, Pelgrin Florian, St-Amour Pascal
ISSN
1057-9230
1099-1050
Publication state
Published
Issued date
02/2020
Peer-reviewed
Oui
Volume
29
Number
2
Pages
138-153
Language
english
Abstract
Near the end of life, health declines, mortality risk increases, and curative care is replaced by uninsured long-term care, accelerating the fall in wealth. Whereas standard explanations emphasize inevitable aging processes, we propose a com- plementary closing down the shop justification where agents' decisions affect their health and the timing of death. Despite preferring to live, individuals opti- mally deplete their health and wealth towards levels associated with high death risk and gradual indifference between life and death. Reinstating exogenous aging processes reinforces the relevance of closing down. Using Health and Retirement Study–Consumption and Activities Mail Survey data for elders, a structural estimation of the closed-form decisions identifies, tests, and confirms the relevance of closing down.
Keywords
Health Policy
Pubmed
Web of science
Create date
09/06/2020 10:20
Last modification date
10/06/2020 5:20
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