A theoretical and empirical study of health-investment behaviour at old age: a thesis submitted for the degree of Doctor of Philosophy in Social and Economic Research -PhD thesis-
This thesis uses theoretical models of health-investment behaviour and new econometric techniques to study the behavioural and stochastic processes governing health-changes in older age-groups. The main purpose of the study is to establish whether or not there is a role for broadly-based preventive strategies among the elderly, aimed at preventing or delaying chronic disease at old age, and alleviating health-care demand.
A health capital model is used to show how uncertainty about the time of death among people who have retired from the workforce may give rise to a 'pure investment' motive for buying units of health-care in order to offset health-losses due to depreciation. If rates of health depreciation in the population depend on modifiable risk factors, this provides theoretical support for the implementation of preventive strategies designed to alleviate future health-care demand by the elderly.
The estimation of econometric latent variable models of health has been hampered by the impracticability of existing 'Feasible' Generalised Least Squares (FGLS) methods for data of mixed scale types. A new FGLS estimator is developed which can be implemented with smaller samples, enables more variables to be analysed, and yields asymptotically correct 2 goodness-of-fit statistics and standard errors. The new approach is applied to the estimation of health-investment equations for elderly men and women, using data from the 1991 and 1995 waves of the British Household Panel Survey. The results help to reconcile conflicting evidence from the economic and epidemiologic literatures on the link between poor health and low socioeconomic status at old age.
To gain some insight into the empirical processes governing health-changes in older age-groups, new statistical techniques for multivariate stochastic analysis are developed and applied to data on elderly men and women from the first five waves (1991-1995) of the British Household Panel Survey. The results suggest that broadly-based preventive strategies aimed at social. socioeconomic and behavioural risk factors may have an important role to play in the non-institutionalised elderly population.