angelaniesenweek2healthservicesmanagement - Week 2 Income Risk and Consumer Demand for Healthcare Week 2 Income Risk and Consumer Demand for Healthcare

angelaniesenweek2healthservicesmanagement - Week 2 Income...

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Week 2 - Income, Risk and Consumer Demand for Healthcare 1 Week 2 - Income, Risk and Consumer Demand for Healthcare Grantham University Angela Niesen Professor: Omar Gafford
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Week 2 - Income, Risk and Consumer Demand for Healthcare 2 Week 2 - Income, Risk and Consumer Demand for Healthcare 1 Why is the depreciation of capital good a cost of society? In what ways does a person’s health depreciate? Depreciation on a good is a cost to society because the more an item depreciates, the less it is worth. For instance a car; A consumer buys a car for $20,000 and drive it off the lot where is depreciated and is now only worth $17,000 if he sells is. To that consumer the cost is $3000. Our health depreciated, or deteriorates over time. This is caused by illnesses, diseases, accidents, and even our choice in lifestyle. The most common way a humans health depreciates, is simply by aging. 1 Why might older people’s healthcare expenditures increase in the Grossman model even though their desired health stocks may be lower? As we grow older our health deteriorates. When we are in the middle of our life we focus more on our health stock to keep from having to pay for health care, and to extend our healthy days. "In this model, death itself it endogenous," (Folland,
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  • Fall '15
  • omar
  • consumer demand

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