Longevity, genes and effort: an optimal taxation approach to prevention
(2011) Journal of Health Economics — Vol. 30, n° 1, p. 62-76 (2011)
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- Abstract
- This paper applies the analytical tools of optimal taxation theory to the design of the optimal subsidy on preventive behaviors, in an economy where longevity varies across agents, and depends on preventive health spending and on longevity genes. Public intervention can be here justified on three grounds: corrections for misperceptions of the survival process and for externalities related to individual preventive behavior, and redistribution across both earnings and genetic dimensions. The optimal subsidy on preventive health spending is shown to depend on the combined impacts of misperception, externalities and self-selection. It is generally optimal to subsidize preventive health spending to an extent depending on the degree of individual myopia, on how productivity and genes are correlated, and on the complementarity of genes and health spending in the survival function.
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Ponthiere, G., Leroux, M.-L., Pestieau, P., & et al. (2011). Longevity, genes and effort: an optimal taxation approach to prevention. Journal of Health Economics, 30(1), 62-76. https://doi.org/10.1016/j.jhealeco.2010.10.003. (Original work published 2011)