UNCERTAINTY AND HEALTH-CARE SPENDING BY THE POOR - THE HEALTH CAPITALMODEL REVISITED

This short theoretical paper examines health care utilization by the p oor in the context of Grossman's (1972) health capital model. Earlier work has shown that uncertainty can reduce the attractiveness to the p oor of health capital investments. This paper demonstrates that uncert ainty can also have precisely the opposite effect. That is, while ther e may be cases in which it is excessively risky for the poor to invest in their health, there may also be cases in which the poor can ill-af ford the risks that arise from not making timely investments in their health.