Background: In health economics, health is regarded as part of an individual's human capital. As such it depreciates over time, and investments in health are made in order to keep the stock of health capital at the desired level. Using this framework for analysis of health-related behaviour and Swedish panel data, we examined whether the presence of asthma or allergy affects perceived health and investments in health. Methods: A set of panel data for approximately 3800 individuals interviewed repeatedly in 1980/81, 1988/89, and 1996/97 was created from the Swedish biannual survey of living conditions. Self-assessed health was chosen as the indicator of health capital and the reported number of sick days as the indicator of health investment. The presence of asthma or allergy, age, wage rate, wealth, marital status, number of children, exercise and smoking habits, gender, and geographic location of household were all chosen as explanatory variables. An ordered probit model was estimated for the health equation and a Poisson model for the investment equation. Results: We found that both asthmatics and those who suffer from allergy invested more in their health than the general population. We also found that asthmatics reported significantly lower self-assessed health than the general population, while those who suffered from allergy did not differ significantly from the general population regarding their self-assessed health. Conclusion: The human capital approach was found suitable for studying the impact of asthma and allergy on individual health behaviour. Health policy measures, which reduce the individual's costs of investing in his or her health, would improve health levels. Because asthmatics were found less healthy than those suffering from allergy, the potential gains would be larger for patients with asthma than for patients with allergy. The issue of whether this would be a costeffective policy or not would require a different design and, hence, could not be solved within the present study.