(DP 1995-01) Diseases and Other Health and Physical Hazards as External Diseconomies: A Theoretical Depiction

Abstract

Under the various types of externality defined on the basis of which entity or entities are involved and the direction of the effect, diseases and other health and physical hazards are theoretically depicted using as conceptual framework the relationship between (a) production functions; (b) production functions and utility functions; (c) utility functions. In all cases considered, the concomitant optimality conditions that rectify the distortionary effect of externalities are defined.