Title

A theory of mood-influenced consumption and investment in health

Authors

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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