The effect of health and health risk factors on non -housing wealth and medical expenses

Alicia Rodriguez-Flores, Purdue University


The purpose of this study was to investigate the effects of health conditions and health risk factors on non-housing wealth changes of older adults. The research was based on Grossman's economic model of health which proposes that health stock is determined by the individual's current and past inputs and behavior. The 4th and 6th waves of the Health and Retirement Study were used to examine the relationship between health problems and health risk factors and the percentage change of non-housing wealth, out-of-pocket medical expenses, and total medical expenses. For couples, changes in non-housing wealth were negatively related to a head of household who abused alcohol, and to a spouse who smoked; wealth changes were positively related to a spouse who was physically active. For single individuals, mild health conditions were negatively related to wealth changes; problem drinking was positively related to changes in non-housing wealth. Out-of-pocket and total medical expenses were also influenced by health conditions and health risk factors. In summary, this research revealed that health risk factors can affect total wealth as well as increase medical expenses. Those who advise consumers in regard to wealth accumulation should include the effect of health and health risk factors. Similarly, those who advise consumers with regard to health and health risk factors should include guidance about the effect of healthy behaviors on wealth.




DeVaney, Purdue University.

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