Health status and health dynamics in an empirical model of expected longevity.

TitleHealth status and health dynamics in an empirical model of expected longevity.
Publication TypeJournal Article
Year of Publication2008
AuthorsBenítez-Silva, H, Ni, H
JournalJ Health Econ
Date Published2008 May
ISSN Number0167-6296
Call Numbernewpubs20080822_JnlHealthEcon
KeywordsChronic disease, Delivery of Health Care, Empirical Research, Female, Health Expenditures, Health Status, Humans, Life Expectancy, Longevity, Male, Models, Econometric

Expected longevity is an important factor influencing older individuals' decisions such as consumption, savings, purchase of life insurance and annuities, claiming of Social Security benefits, and labor supply. It has also been shown to be a good predictor of actual longevity, which in turn is highly correlated with health status. A relatively new literature on health investments under uncertainty, which builds upon the seminal work by Grossman [Grossman, M., 1972. On the concept of health capital and demand for health. Journal of Political Economy 80, 223-255] has directly linked longevity with characteristics, behaviors, and decisions by utility maximizing agents. Our empirical model can be understood within that theoretical framework as estimating a production function of longevity. Using longitudinal data from the Health and Retirement Study, we directly incorporate health dynamics in explaining the variation in expected longevities, and compare two alternative measures of health dynamics: the self-reported health change, and the computed health change based on self-reports of health status. In 38% of the reports in our sample, computed health changes are inconsistent with the direct report on health changes over time. And another 15% of the sample can suffer from information losses if computed changes are used to assess changes in actual health. These potentially serious problems raise doubts regarding the use and interpretation of the computed health changes and even the lagged measures of self-reported health as controls for health dynamics in a variety of empirical settings. Our empirical results, controlling for both subjective and objective measures of health status and unobserved heterogeneity in reporting, suggest that self-reported health changes are a preferred measure of health dynamics.

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Alternate JournalJ Health Econ
Citation Key7234
PubMed ID18187217
PubMed Central IDPMC2862058
Grant ListP01 AG022481 / AG / NIA NIH HHS / United States
P01 AG022481-01A1 / AG / NIA NIH HHS / United States
P01 AG022481-040004 / AG / NIA NIH HHS / United States
5 P01 AG022481-04 / AG / NIA NIH HHS / United States