Propose a theoretical framework that includes both a role for preventive actions and treatment in producing health outcome.
Preventive actions and treatment affect health through food choices and medical services, respectively.
An agent’s food choices (i.e. calorie decision) alter the distribution of future health shocks.
Theoretical results suggest that under certain conditions wealthier agents choose a healthier diet than lower income ones.
Numerical exercise captures U.S. cross-sectional facts regarding medical, food and non-food expenditures.