Human Health and the Environment

The relationship between individual health considerations and environmental outcomes remains insufficiently explored in economic theory. This paper examines how concern for personal health influences private environmental investment and long-run environmental quality. We develop an overlapping generations model in which an individual’s overall health status depends jointly on intrinsic health capital and environmental quality, allowing for limited substitutability between the two. Individuals allocate income between consumption, savings, health investment, and green investment, while environmental quality evolves endogenously through production-driven pollution and both private and public abatement activities. The analysis shows that stronger concern for personal health increases private environmental investment and improves steady-state environmental quality, even though it reduces physical capital accumulation by diverting resources towards health- and environment-related uses. Public environmental spending and improvements in the effectiveness of green initiatives further enhance environmental quality and indirectly stimulate private health investment, despite partially crowding out private green effort. These findings highlight health preferences as an important behavioral channel for environmental sustainability and suggest that policies raising awareness of environmental health risks can effectively complement the standard mechanisms of environmental regulation.