Dementia Problem Behavior and the Production of Informal Caregiving Services*

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Informal caregivers of individuals with Alzheimer's disease spend a considerable amount of time providing care. In this paper, we use Grossman's health production and Becker's time allocation models to develop a model of informal care provision to elderly dementia patients. In our model, time inputs produce caregiving services, which provides utility to the caregiver, but reduces leisure. We assume that time is less productive of services on the margin as the disease progresses. In this framework, an increase in patients' disease severity does not necessarily increase informal caregiver time input. The cost of formal care establishes a reservation price for informal caregiving. When the costs of informal caregiving rise above this reservation level, the patient is institutionalized. We test empirically the effect of deterioration in the patients' condition, proxied by both disease severity and dementia problem behavior, on informal caregiving time. We find that dementia-related problem behaviors and functional limitations significantly increase inputs of informal caregiving time. Patients' problem behavior exerts a modifying effect on functional limitations, and patients' comorbidities have no effect on informal caregiving time.

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