Health Economics of Genetic Distance

In this note, I address the trade-off between children’s health and parental preference toward similarity with children. In my model, better-off individuals mate genetically close partners and then use wealth to treat their children’s health problems, caused by inbreeding depression. As a result, the relationship between parental wealth and children’s health includes decreasing portions. Siblings health inequality is also nonmonotonically related to parental wealth, if parents discriminate in favor of more similar children.