Logo Logo
Hilfe
Hilfe
Switch Language to English

Schwardmann, Peter (2017): Motivated Health Risk Denial and Preventative Health Care Investments. Collaborative Research Center Transregio 190, Discussion Paper No. 33 [PDF, 454kB]

[thumbnail of 33.pdf]
Vorschau
Download (454kB)

Abstract

People deny health risks, invest too little in disease prevention, and are highly sensitive to the price of preventative health care, especially in developing countries. Moreover, private sector R and D spending on developing-country diseases is almost non-existent. To explain these empirical observations, I propose a model of motivated belief formation, in which an agent's decision to engage in health risk denial balances the psychological benefits of reduced anxiety with the physical cost of underprevention. I use the model to study firms' price-setting behaviour and incentive to innovate. I also show that tax-funded prevention subsidies are welfare enhancing.

Dokument bearbeiten Dokument bearbeiten