Wealthier individuals engage in healthier behavior. This paper seeks to explain this phenomenon by developing a theory of health behavior, and exploiting both lottery winnings and inheritances to test the theory. It distinguishes between the direct monetary cost and the indirect health cost...

Wealthier individuals engage in healthier behavior. This paper seeks to explain this phenomenon by developing a theory of health behavior, and exploiting both lottery winnings and inheritances to test the theory. We distinguish between the direct monetary cost and the indirect health cost (value...

We study the household sector's post-tax income and debt position as propagation mechanisms of public into private spending, in postwar U.S. data. In structural VARs, we obtain the consumption "crowding-in puzzle" for surges in public spending and show this consumption response to be accompanied...