An Empirical Analysis of Health-Dependent Utility on SHARE and ELSA Data

This paper investigates the presence of health-dependent utility on a panel European countries. We follow strategy Finkelstein et al. (J Eur Econ Assoc 11:221–258, 2013) and extend their analysis focusing different health measures. The results show that exhibits an increase in marginal to consume when physical deterioration occurs. For cognitive decline, we find decrease for low memory skills verbal fluency. However, both are not statistically significant, thus evidence is limited. individuals living low-spending countries long-term care services experience greatest drop compared others. Overall, these suggest heterogeneity direction sick state occurs, this goes opposite recent empirical findings US. A potential explanation might be found welfare systems.