Noncommunicabe chronic diseases and health capital

Abstract

We present an OLG model in which is introduced an externality for chronic noncommunicable diseases (CND). Indeed, the probability of suffering from a chronic disease when old depends on individuals’ parents’ choices and, therefore, on the inherited health capital. In this way we introduce a mechanism for the inter-generational transmission of CND that justifies the epidemics. We discuss how policy might influence the level of health capital/probability of suffering from a CND. We also debate the welfare implications of policies aiming internalizing the inter-generational externality.