The utility of health and wealth

Tradeoffs between health and wealth are among the most important decisions individuals make, and are central to social and economic policy. Yet, only a few studies have investigated the utility of health and wealth empirically. This paper investigates this utility function both theoretically and empirically. We conduct detailed personal interviews with 180 cancer patients, and also obtain questionnaires from 132 diabetes patients. We find strong support for the utility function U(h, w) = h · log(w), where h denotes health and w denotes wealth.