Skeleton Notes #2 Flashcards
models and individuals goals and contraints
the grossman model
the goal of the individual is:
to maximize utility
happiness, well-being
utility
how do we maxmize utility
increasing h and z
h represents _______. we buy ______________ to increase h.
health
m goods/services
z represents ________. we buy ________ to increase z.
other goods/services
j goods/services
although both h and z increase utility they show _____________
diminishing marginal activity
what is an example of having diminishing marginal utility in h goods
overuse of vitamins, medicines, antibiotics
the production of health (and z) requires two things
time
income/resources
formula for total time:
t^s + t^w + t^h + t^z
income equals:
wage x time working
the less time i spend ___- the more time i can _____ and thus make more _____ and thus invest in things that improve my ____ which should help lower the time i spend _____-
sick
work
income
health
sick
draw a time tradeoff graph (people have different preferences and constraints) in which person 1 is sick a lot and person 2 is healthy. they both make 10 an hour
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draw a z-h production possibility frontier (ppf) of a low income country vs a high income
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for the time tradeoff model, increases ___ allows for more time on ____ and ____ which allows for higher _____
health
work
z
utility
Becker and Grossman applied tools of _____ to human decisions on education and health
finance
health acts as three types of goods in the grossman model
health is both a consumption good, as we gain utility from it
health is a production good, and increases our ability to earn higher incomes
health is a form of wealth capitol, investments yield returns
in order to maximize lifetime utility, we can increase the stock of health capitol by ______
adding to it, with flows such as exercise and healthy behaviors
we can lose the stock of capital by _____
not properly taking care of it;
smoking, eating doritos, unhealthy behavior
like other forms of capital health can ____ or be _____ for example:
depriciate
i.e aging
the MCH is made up of two things:
opportunity costs of spending time/resources in health activities
depreciation rate
what are some examples of MCH that deteriorate health. how would these move the MCH line?
dementia, lead in the water, pollution, depression, stress, aging.
the MCH line would shift UP
why is the MBH negative?
the diminishing marginal utility of health and the diminish marginal product of time spent on health-inducing activities
lack of ____ lowers MBH because _____. this would lead the MCH line to shift ____.
access
it takes more time/resouces to use them
up
higher incomes _ the MBH line because _________. this would lead the MBH line to shift _________
increase
you make incentive to be on the job more
up/right
how do MBH lines shift
left/right
how do MCH lines shift
up/down
what does r stand for on a MCH/MBH graph
opportunity cost
what does s stand for on a MCH/MBH graph
depreciation rate
what does the MBH depend on
preferences/situation
wages/income
time preferences
what are the three views of shocks
Myself receiving a shock
Compare to simular person
Compare different subgroups
what shocks the MBH to shift up/right
1.change in preferences for a healthier lifestyle
2. change in time preferences for more future oriented
3. increase access to recreation or health services
4. increase wages
5. education/mentors
draw a graph of the shock of new, safe testosterone therapies
-
draw a graph of the shock of increased episodes of permanent dementia
-
the idea that more education or knowledge potentially leads to greater levels of health
efficient producer hypothesis
how does the efficient producer hypothesis effect the graph
MCH down, health level up
unhealthy conditions in utero or in early childhood lead to worse health conditions in later life.
thrifty phenotype hypothesis
how does the thrifty phenotype hypothesis effect the graph
lower ppf, depreciation up, MCH up
those with higher economic resources (wealth) can invest more in health
direct income hypothesis
prolonged exposure to stressful situations can have a number of harmful physiological effects, including memory loss, stroke, and accelerated aging of the brain.
allostatic load hypothesis
how does the direct income hypothesis affect the graph
higher ppf, higher MBH
how does the allostatic load hypothesis effect the graph
depreciation up, MCH u, health level down
increased inequality might lead to greater health disparities through many mechanisms
income inequality hypothesis
people who live in rural areas, who have a disabling condition with limited transport, or who are severely poor have less access to healthcare
access to care hypothesis
how does the access to care hypothesis affect the graph
lower ppf, higher opportunity cost, higher MCH, health level down
those in poor health have less time to search for work and earn income, lowering their ppf
productive time hypothesis
those with greater patience and foresight are better at seeing the future benefits of making healthy chooses now - those with more patience are more likely to invest now in their health.
time preference hypothesis
how does the time preference hypothesis effect the graph
MBH up
