Health aspirations and the epidemic of non-communicable chronic diseases

Abstract

We look at how social norms regarding health affect the dynamics of an epi-demic of non-communicable chronic diseases (NCDs). We present an overlapping generations model in which agents live for three periods (childhood, adulthood and old age). Adulthood consumption choices have an impact on the health capital of the following period, which is in part inherited by their offspring and affects their offsprings’ probability of developing a NCD. As a result of this intergenerational externality, agents would choose lower health conditions and higher unhealthy ac-tivities than what is socially optimal. In addition, parental choices affect their own old age health capital and thus their offspring health aspirations. Such health as-pirations work as social norms as they constrain individual behavior. Yet we show that they enhance welfare because they counterbalance the former intergenerational externality leading to lower levels of NCDs. As a result, externalities can be inter-nalized with lower taxes and strong health aspirations.

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Reference

Catarina Goulão, and Agustín Pérez-Barahona, “Health aspirations and the epidemic of non-communicable chronic diseases”, TSE Working Paper, n. 21-1236, July 2021, revised June 2023.