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Review of Economics of the Household

, Volume 15, Issue 4, pp 1215–1248 | Cite as

Health capital investment and time spent on health-related activities

  • Juan Du
  • Takeshi Yagihashi
Article

Abstract

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.

Keywords

Time allocation Health production Health capital Leisure time Labor supply 

JEL classification

I1 J22 

Notes

Acknowledgements

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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Copyright information

© Springer Science+Business Media, LLC 2017

Authors and Affiliations

  1. 1.Department of EconomicsOld Dominion UniversityNorfolkUSA

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