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This paper explores in a two-period model the economic implications of people’s tendency to underestimate their ability to adapt to age-related health problems. We model this misperception by assuming that the individual underestimates his future subjective health. Under standard assumptions, we show that, when people allocate their resources during their(More)
This paper investigates the reliability of self-assessed measures of health using panel data collected in Albania by the World Bank from 2002 to 2004 through the Living Standard Measurement Study project. As the survey includes questions on the usual self-assessed measure of health and on more objective health problems, we combine both types of information(More)
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