On the Determinant of Human Health: An Economic Perspective

3 INTRODUCTION Since Arrow’s (1963) seminal paper, interest in the economic aspect of health issues and in economists’ opinion about how to deal with problems related to health and the health care sector has strongly grown. Arrow’s paper announced the entry of health economics as a new discipline and became one of the most widely cited articles in the field of health economics. Today, health is considered one of the most valuable personal and universal rights: [The enjoyment of the highest attainable standard of health is one of the funda- mental rights of every human being without distinction of race, religion, political belief, economic or social condition.], as stated in the preamble to the World Health Organization (WHO) Constitution; the determinants of health and health inequalities have became two issues of vital impor- tance to health policy in establishing the extent to which the effect of various non-medical inputs such as income, education, social position, age, ethnicity, health-related behaviors and environmental quality contribute to modify the individual health status. Grossman’s (1972) contribution was the first formal economic model of the deter- minants of health and represented the first relevant theoretical and empirical work after Arrow’s theoretical approach. Treating health as endogenous was a major difference be- tween Grossman’s model and the health models that preceded it. Drawing on the theory of human capital formulated by Becker (1965), Grossman constructed a model where in- dividuals use medical care and their own time to produce health. Grossman interpreted a person’s health as a capital stock that exogenously deteriorates at an increasing rate with age. To counteract this health deterioration, he assumed that individuals invest a