On the demand for preventive care

This paper analyzes the demand for preventive care in an optimal control model in which utility is not contingent on the state of health and preventive measures are taken against future costs of curative care. It turns out that the demand for preventive care depends negatively on its price, and positively on the price of curative care and on the life-span. The influence of the depreciation rate on health capital is ambiguous. While the sign of the income elasticity cannot be determined in general, it may be positive if income is negatively correlated with the rate of time preference.