Non-communicable chronic diseases and health capital

We develop a model where there is an intergenerational external-ity concerning obesity and NCDs with two channels of transmission. On the one hand parents affect the inherited health capital and on the other hand they affect the probability of their children being obese/catch up a chronic disease when old. Parents are not fully al-truistic and when they make their choices they do not fully account for the impact of their choices on their children’s health. Consequently, the negative externality results on a lower health capital level and a higher level of unhealthy activities at the descentralized equilibrium, when contrasted to the optimal choices. Taxes on unhealthy activi-ties or subsidies on health investments can be used to restore optimal health capital and unhealthy activities levels. Our model is consistent with different development regimes