A Model of Investment Timing for Developing Childhood Health Capacity

Abstract

The increasing prevalence of obesity yields numerous social costs in the form of lower productivity, higher Medicare and Medicaid costs, and higher insurance premiums. These negative externalities create a public interest for societal investment to reduce the shared costs of obesity related healthcare and efficiency losses. Understanding that health preferences and skills developed in childhood greatly impact adult outcomes, this paper provides a framework for evaluating the optimal timing of investment in childhood health for the prevention of obesity. The two period model provides a means to evaluate how economical early preventative investments are compared to later reparative health investments. It is likely that preventative health investments in childhood would prove cost effective compared to the high costs of adulthood obesity and its resulting comorbidities.