A theory of mood-influenced consumption and investment in health

    Authors

    M. R. Caputo;A. Levy

    Comments

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    Abbreviated Journal Title

    Math. Soc. Sci.

    Keywords

    COMPARATIVE STATICS; SELF-APPRAISAL; LIFE-CYCLE; Economics; Mathematics, Interdisciplinary Applications; Social Sciences, ; Mathematical Methods

    Abstract

    A mood-utility link is incorporated into a theory of rational consumption and investment in personal health, whereby one's mood worsens as instantaneous utility falls below a threshold but improves as instantaneous utility rises above it. The analysis is conducted within an intertemporal framework, where instantaneous utility is gained and lost and good and bad moods are experienced along a health-dependent random lifespan. The qualitative properties of the resulting optimal control model are investigated by making use of the Frischian form of the feedback demand functions. One of several surprising results derived from this framework is that the marginal value of health can be negative or positive, whereas the marginal values of wealth and mood are unambiguously positive. (c) 2012 Elsevier B.V. All rights reserved.

    Journal Title

    Mathematical Social Sciences

    Volume

    63

    Issue/Number

    3

    Publication Date

    1-1-2012

    Document Type

    Article

    Language

    English

    First Page

    218

    Last Page

    227

    WOS Identifier

    WOS:000304228000005

    ISSN

    0165-4896

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