✍ Scribed by Christophe Courbage; Béatrice Rey
No coin nor oath required. For personal study only.
Empirical evidence suggests the existence of a positive relationship between fear of sickness (FS) – as measured by the level of future utility lost when sickness occurs – and the level of effort to prevent the occurrence of sickness. By looking theoretically at this issue, we develop new results on the determinants of optimal prevention for health risks. In particular, we show that a sufficient condition to pursue more prevention for an individual with a higher FS than another is to have lower prudence in Kimball's (1990) sense, whatever the distribution of risk. These findings reinforce the role of prudence as a main determinant of the optimal level of prevention. Copyright © 2006 John Wiley & Sons, Ltd.
📜 SIMILAR VOLUMES
In a recent contribution to this journal, M. Hoel correctly shows that under risk aversion the allocation of health resources should be directed to health conditions for which the expected outcomes are below average. In this letter we show that besides risk aversion, the degree of absolute prudence