Health Capital as a Determinant of Living Standard and Life Satisfaction. An Empirical Study

In this paper, the data from a socio—economic survey carried out in South Bohemia (a region of the Czech Republic) in the years 2003 and 2004 are used to estimate two models. The first model considers the health status of the individual to be an investment commodity, which enhances the productivity and the earning potential of the individual and thus his/her living standard. The second model considers the influence of health status of the individual on his/her life satisfaction and treats the health of the individual as a consumption commodity entering the individual preference function directly. In both models, the health status of the individual is significant in influencing dependent variables, living standard and life satisfaction respectively.