Question

[True/False/Uncertain. Explain.] The population in Newfoundland & Labrador are healthier because they are older and have lower levels of education, which increases their demand for health capital (as predicted by the Grossman Model's Investment demand for health).

Canada has a well-documented East-West health gradient, where provinces in the east have lower levels of health than provinces in the west. Table 1 below provides some evidence of the East-West health gradient (using the Body Mass Index as a proxy measure for health), as well as the percentage of the population by age group and highest level of education. an explanation as to why the East-West health gradient may exist (in the context of the Grossman Model’s Investment demand for health).

Table 1 Newfoundland & British Columbia Labrador Health Status Underweight/Normal 33.4% 54.8% Overweight 36.1% 30.1% Obese 29.5% 15.1% Age 8.9 Under 20 9.8% 20-34 19.4% 21.8% 35-64 53.0% 49.7% 65 and older 18.7% 18.7% Highest Level of Education Less than High School 21.2% 14.4% 21.2% High School Grad. 28.0% Post-Secondary Grad. 57.6% 57.6%

Answer 1

False
Demand for health services and health (as a stock) are different variables
Lower education and higher age will reduce the health stock and therefore the population will be less healthy