Classic Hall & Jones paper predicts AI will keep pushing health spending share up
soumitrashukla9 · x · 2026-10-12
Sharing Andrey Fradkin's citation of the Hall & Jones QJE 2007 paper (1375+ citations): healthcare is a superior good with income elasticity well above one—as people get richer, the marginal utility of consumption falls and buying extra years of life dominates.
Implication for the AI era: as AI boosts wealth, healthcare's share of spending should keep rising, since a year of life is worth far more than marginal material consumption.
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