ABSTRACT
This chapter shows how individuals allocate the resources to produce health. The model has enabled us to understand thoroughly the roles of age, education, health status, and income in the production of health through the demand for health capital. The chapter provides a useful format for examining the causes and impacts of obesity, an important and current family health topic. Consumers do not merely purchase health passively from the market. Instead, they produce health, combining time devoted to health-improving efforts including diet and exercise with purchased medical inputs. Consider a consumer, Ed Kramer, who buys market inputs, and combines them with his own time to produce a stock of health capital that produces services that increase his utility. Education is especially interesting to those who study health demand. The demand for health due to education is difficult to separate from the supply effect of education, which implies more productivity in producing health.
