The economics of aging with infectious and chronic diseases

Abstract

We develop an economic model of aging in which the susceptibility and severity of infectious diseases depend on the accumulated health deficits (immunosenescence) and the life history of infections affects the accumulation of chronic health deficits (inflammaging). Individuals invest in their health to slow down health deficit accumulation and take measures to protect themselves from infectious diseases. We calibrate the model for an average American and explore how health expenditure, life expectancy, and the value of life depend on individual characteristics, medical technology, and the disease environment. We then use counterfactual computational experiments of the U.S. epidemiological transition 1860–2010 to show that the decline of infectious diseases caused a substantial decline of chronic diseases and contributed more to increasing life expectancy than advances in the treatment of chronic diseases.