Topic > Grossman's Theory of Health - 1299

Conceptual Framework A person's health is influenced by many factors such as choice of medical care, insurance, social status, environment, diet, and so on. To derive a model for health behaviors, I begin with a widely used theory by Grossman (1972). Grossman introduced the concept of health capital and used the idea that every individual is a producer of health. That is, people can invest in their health and accumulate their health capital by adding medical care, food, education, etc. to achieve better health outcomes (Grossman, 1972). People increase more medical treatment to achieve better health. Grossman's model identifies two reasons to explain why people seek more medical care: an investment incentive and a consumption incentive. From an investment perspective, people would have more healthy days to dedicate to work and leisure if they invested more in their health. From the consumption perspective, health directly increases people's utility; that is, they feel better when they are healthier, and good health increases the quality of their work and leisure (Grossman, 1972; Dolan 2003). The demand for health can be derived from the demand for utility, which is a utility maximization problem. Individual utility is a function of health stocks and a group of commodities from period 0 to period nU=U( Health Stock_0,…,Health Stock_n,Commodity_0,…,Commodity_n ) (1) The main idea of ​​the article by Grossman (1972) is to treat health as a capital stock so that people can produce more health capital by investing in health. Health stock_(t+1)= Health stock_t-δ Health stock_t+Investment (2) δ is the rate of depreciation that can be caused by aging, illness or injury in period t. We must also consider the family unit...... middle of paper ......marital status, father of the family, mother of the family, members of the family unit, family income and wealth indicator, to control the three behaviors linked to health, to control the three health-related behaviors. To generate family income, add up all the family's earnings from farming, gardening, fishing, selling crops and livestock, and small household activities. The wealth indicator is also generated as a dummy with a binary outcome, where the value is equal to 1 if a family simultaneously owns a color TV, refrigerator, air conditioner, computer, telephone, mobile phone and motorcycle, and 0 otherwise. Variables collected above are based on Grossman's theory for healthcare asset inputs. To examine the effect of education on health behaviors, I will use Grossman's concept to derive the empirical model and use these variables to see the results.