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The Grossman model is extended to a situation in which the family is regarded as the producer of individual health and spouses are Nash-bargainers. The model has implications for the interaction between family structure, income and the stocks of health capital and the bargaining strength of different family members. The main insight is that the possibility of divorce affects the distribution of health...
Deriving a model, where each family member is the producer of his own and other family members' health, shows that the family will not try to equalise marginal benefits and marginal costs of health capital for each family member. They will rather invest in health until the rate of marginal consumption benefits equals the rate of marginal net effective costs of health capital. The level of compensation...
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