Approaches to Estimating the Health State Dependence of the Utility Function
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Approaches.pdf
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Author(s)
Finkelstein, Amy
Luttmer, Erzo F. P.
Notowidigdo, Matthew J.
Date Issued
May 2009
Journal
American Economic Review
Publisher
American Economic Association
Citation
Finkelstein, Amy, Erzo F. P. Luttmer, and Matthew J. Notowidigdo. “Approaches to Estimating the Health State Dependence of the Utility Function.” American Economic Review 99.2 (2009): 116-21.
Version
Author's final manuscript
Abstract
In this paper, we outline what we believe
are the main possible approaches to estimating
health state dependence. We distinguish
two broad classes of empirical approaches:
approaches based on individuals’ revealed
demand for moving resources across health
states, and approaches based on observed utility
changes associated with health changes for
individuals of different consumption or resource
levels. We discuss the appeals and challenges of
each, in turn. Our basic conclusion is that while
none of these approaches is a panacea, many
offer the potential to shed important insights on
the nature of health state dependence.
MIT Department
Massachusetts Institute of Technology. Department of Economics
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Attribution-Noncommercial-Share Alike 3.0 Unported
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DOI of Published Version
http://dx.doi.org/10.1257/aer.99.2.116
