THE DEMAND FOR PREVENTIVE MEDICAL-CARE

The idea that people invest in health capital is an essential part of models of the demand for health, but the investment motives behind health decisions are often obscured by other factors. This empirical paper investigates the demand for adult preventive medical care, where the investment motives are relatively clear cut. Several important results demonstrate the usefulness of the approach. First, the analysis finds that annual use of two preventive services decreases with age. Although not the only plausible explanation, the results are consistent with individuals rationally reducing their use of preventive care as the pay-off period to the investment shortens over the lifecycle. Second, schooling is found to be an important determinant of demand, with the more educated much more likely to use the services. Neither lifecycle nor schooling effects are consistently found in studies of the demand for curative care. Finally, the empirical analysis also provides additional evidence on the responsiveness of the demand for preventive care to changes in insurance coverage, an important issue for health policy.