Published in:Center for European Governance and Economic Development Research, Discussion Papers ; No. 268, November 2015
Extent:
1 Online-Ressource (24 p)
Language:
English
DOI:
10.2139/ssrn.2695811
Identifier:
Origination:
Footnote:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments November 2015 erstellt
Description:
Aging humans adapt to their worsening state of health and old people are usually happier than estimated by young individuals. In this paper we investigate how adaptation to a deteriorating state of health affects health spending, life expectancy, and the value of life. We set up a a life cycle model in which individuals are subject to physiological aging, calibrate it with data from gerontology, and compare behavior and outcomes of adapting and non-adapting individuals. While adaptation generally increases the value of life (by about 2 to 5 percent), its impact on health behavior and longevity depends crucially on whether individuals are aware of their adaptive behavior