Health capital investment and time spent on health-related activities
One key component in the health capital investment model in (Grossman, M. Journal of Political Economy, 80: 223–255, 1972) is time spent on improving health. However, few empirical studies have examined how time spent on health investment is determined. In this paper, we fill this void in the literature by investigating how people allocate their time for different types of health-related activities in response to economic variables. Using the American Time Use Survey, we distinguish health-enhancing and health-deteriorating leisure activities, with the rationale that these activities may respond differently to socioeconomic environment. We find that health-enhancing and health-deteriorating time respond to economic variables in opposite directions. Specifically, a higher wage rate leads to a reduction in health-deteriorating activities but an increase in health-enhancing activities, particularly those with an investment nature. This finding holds for most subsamples we examine. Our result implies substantial substitution within nonmarket time.
KeywordsTime allocation Health production Health capital Leisure time Labor supply
JEL classificationI1 J22
We are grateful to Michael Grossman for his invaluable comments. We would also like to thank participants at the Time Use Conference organized by the University of Maryland for their helpful comments.
Compliance with ethical standards
Conflict of interest
The authors declare that they have no competing interests.
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