This paper developed Grossman’s classical demand-for-health model in five
ways, see Table 1 for a summary.
First, the depreciation of health capital was assumed to depend on the level of
health. Here, the depreciation decreased with an increased level of health ceteris
paribus.. This reducedincreased. the individual’s marginal valuation, at optimum,
of health capital if the ‘initial’ level of health was highlow.. Since the utility
function was concave, it was concluded that the stock of health capital increased
decreased.in this model when the ‘initial’ level of health was high low.. This
result is similar to those of Zweifel and Breyer1996., who predicted that the
individual’s WTP for an expected health improvement will be bigger when the
individual is sick than when he or she is healthy.