A theoretical rationale for an inelastic demand for health care

This paper provides a theoretical rationale for the empirical finding that the demand for health care is inelastic. Using Wagstaff [Bull. Econ. Res. 38 (1986) 93] version of Grossman [J. Polit. Econ. 80 (1972) 223] human capital model of the demand for health, the paper develops a criterion to identify restrictions on the basics of the model (i.e., on the utility and health production functions) for the purpose of realizing an inelastic demand for health care.