"We estimate how the marginal utility of consumption varies with health. To do so, we develop a simple model in which … the impact of health on the marginal utility of consumption can be estimated from data on permanent income, health, and … proxy for utility with measures of subjective well-being. We find robust evidence that the marginal utility of consumption …

This paper shows that the combination of habit formation - present consumption creating additional consumption needs in …-best setting the optimal solution can be decentralized by a simple "Pigouvian" (paternalistic) consumption tax (along with suitable … lump-sum taxes). In a second-best setting, when personalized lump-sum transfers are not available, consumption taxes may …