ABSTRACT
Introduction Ever since the seminal article by Arrow (1963), it has been a commonplace to note that the presence of uncertainty is a particularly salient feature in decisions on health and health care. A number of studies have appeared that introduce probabilistic elements in the individual’s demand for health, and there is a substantial literature that focuses on the value of changes in health risks. For example, in the so-called demand-for-health tradition – emanating from Grossman’s (1972) wellknown work – there are several probabilistic versions,1 and the implications of risk in the health production function have been explored in a valuation context (Johansson, 1994).2 There remains to introduce, however, the distinction between risk – i.e. uncertainty with known probabilistic properties – and genuine uncertainty – i.e. uncertainty with unknown probabilistic properties – in formal models of health-related behaviour.
