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Family bequests and the derived demand for health inputs
Economic Inquiry
|June 11, 1979
Insights
Parents
Area of Science:
- Economics
- Health Economics
- Family Economics
Background:
- Parents make resource allocation decisions impacting children's health and financial future.
- Understanding these decisions is key to family economics and child development.
Purpose of the Study:
- To analyze a family investment model for resource allocation.
- To test hypotheses on how family resources affect child health investments and outcomes.
Main Methods:
- Specified a family investment model.
- Tested hypotheses using cross-sectional data.
Main Results:
- Child physician visit demand is income-dependent up to a threshold.
- Maternal education positively influences child health investments.
- Health investments in early childhood correlate with reduced adult illness.
Conclusions:
- Family resource allocation significantly impacts child health.
- Early health investments yield long-term benefits for children's health.
Abstract:
A family investment model whereby parents allocate resources among their own consumption, health investments and financial bequests to children is specified and used to develop hypotheses which are tested on cross section data. As predicted by the model, the demand for physician visits for young children is found to 1) depend on family income only up to some level ($10,000 in 1969 $ in this case), 2) increase with maternal education, and 3) vary with price measures and family size, There is also evidence that greater health investments in young children pay off in fewer severe illnesses in young adulthood.