A Theory of Gene by SES Interaction in Health Behavior

We present a lifecycle theory of gene by socioeconomic status (SES) interaction in unhealthy behavior. The foundation for the theory is provided by the seminal theory of health due to Grossman (1972). To this model we add genetic heterogeneity in preferences and health production, and potentially addictive behavior, such as, e.g., smoking, overeating and excessive alcohol consumption. We allow genes to affect utility and model utility as a function of the stock of past consumption of the unhealthy consumption good, capturing habit formation. We model “withdrawal” as a negative effect on utility of the cessation of consumption, “tolerance” as reduced satisfaction from current consumption resulting from cumulative past consumption, and “reinforcement” as past consumption raising the marginal utility of current consumption. The theory provides a conceptual framework for analyzing the role of genetics in explaining health behavior and for predicting how SES moderates this process. It predicts rich interactions between genes, SES, health behavior, health and longevity. For example, comparative dynamic analyses show that SES (as measured by wealth, earnings, and education) increases the “value” of health (the additional life-time utility resulting from better health). This increases the demand for health investment and reduces the demand for unhealthy consumption. Withdrawal, tolerance, and reinforcement, however drive unhealthy behaviors forward. These competing effects suggest SES protects individuals from detrimental genetic endowments by raising the value of health, thereby reducing consumption and addiction. We also present empirical evidence of gene by SES interactions in smoking and overeating (obesity). We find evidence of substantial protective effects of SES for those who possess detrimental genetic endowments, and explore mechanisms.