Aging humans adapt to their worsening state of health and old people are usually happier than estimated by young individuals. In this paper we investigate how adaptation to a deteriorating state of health affects health spending, life expectancy, and the value of life. We set up a a life cycle...

There exists a steady trend at which later born cohorts, at the same age, are healthier than earlier born cohorts. We show this trend by computing a health deficit index for a panel of 14 European Countries and six waves of the Survey of Health, Aging, and Retirement in Europe (SHARE). We find...