Advanced Search
MyIDEAS: Login to save this article or follow this journal

Demand systems and the true subindex of the cost of living for pharmaceuticals

Contents:

Author Info

  • Michael Baye
  • Robert Maness
  • Steven Wiggins

Abstract

This paper investigates the demand for prescription pharmaceuticals at the retail level. We use complete demand systems to investigate elasticity for major classes of pharmaceuticals. We estimate both a regular and an inverse demand system using a differential version of the Rotterdam model. We find that both systems yield negative, and statistically significant own-price elasticities. The results indicate that pharmaceutical demand curves are not perfectly inelastic as some industry commentators suggest. We use the results of the complete demand system and a variant of a formula developed by Balk (1990) to derive a cost-of-living subindex for retail pharmaceuticals. We find that retail pharmaceutical prices using our index rise faster than wholesale prices, calculated either by the BLS or by the methods developed by Berndt et al.(1993).

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.tandfonline.com/doi/abs/10.1080/00036849700000009
Download Restriction: Access to full text is restricted to subscribers.

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Bibliographic Info

Article provided by Taylor & Francis Journals in its journal Applied Economics.

Volume (Year): 29 (1997)
Issue (Month): 9 ()
Pages: 1179-1190

as in new window
Handle: RePEc:taf:applec:v:29:y:1997:i:9:p:1179-1190

Contact details of provider:
Web page: http://www.tandfonline.com/RAEC20

Order Information:
Web: http://www.tandfonline.com/pricing/journal/RAEC20

Related research

Keywords:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Zvi Griliches & Iain Cockburn, 1993. "Generics and New Goods in Pharmaceutical Price Indexes," NBER Working Papers 4272, National Bureau of Economic Research, Inc.
  2. Eales, James S. & Unnevehr, Laurian J., 1994. "The inverse almost ideal demand system," European Economic Review, Elsevier, vol. 38(1), pages 101-115, January.
  3. Deaton, Angus S & Muellbauer, John, 1980. "An Almost Ideal Demand System," American Economic Review, American Economic Association, vol. 70(3), pages 312-26, June.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Richard D. Smith & Milton Yago & Michael Millar & Joanna Coast, 2006. "A Macroeconomic Approach to Evaluating Policies to Contain Antimicrobial Resistance: A Case Study of Methicillin-Resistant Staphylococcus aureus (MRSA)," Applied Health Economics and Health Policy, Springer Healthcare | Adis, vol. 5(1), pages 55-65.
  2. Massimo Filippini & Giuliano Masiero & Karine Moschetti, 2009. "Physician dispensing and antibiotic prescriptions," Quaderni della facoltà di Scienze economiche dell'Università di Lugano 0908, USI Università della Svizzera italiana.
  3. Massimo Filippini & Giuliano Masiero & Karine Moschetti, 2008. "Dispensing practices and antibiotic use," Quaderni della facoltà di Scienze economiche dell'Università di Lugano 0808, USI Università della Svizzera italiana.
  4. Laura González & Giuliano Masiero, 2011. "Disentangling spillover effects of antibiotic consumption: a spatial panel approach," Quaderni della facoltà di Scienze economiche dell'Università di Lugano 1106, USI Università della Svizzera italiana.
  5. Filippini, Massimo & Masiero, Giuliano & Moschetti, Karine, 2006. "Socioeconomic determinants of regional differences in outpatient antibiotic consumption: Evidence from Switzerland," Health Policy, Elsevier, vol. 78(1), pages 77-92, August.
  6. Filippini, M. & Masiero, G. & Moschetti, K., 2009. "Regional consumption of antibiotics: A demand system approach," Economic Modelling, Elsevier, vol. 26(6), pages 1389-1397, November.
  7. Niklas Rudholm, 2003. "Competition and substitutability in the Swedish pharmaceuticals market," Applied Economics, Taylor & Francis Journals, vol. 35(14), pages 1609-1617.
  8. Elamin H. Elbasha, 2003. "Deadweight loss of bacterial resistance due to overtreatment," Health Economics, John Wiley & Sons, Ltd., vol. 12(2), pages 125-138.
  9. Massimo Filippini & Fabian Heimsch & Giuliano Masiero, 2013. "Antibiotic consumption and the role of dispensing physicians," CEPRA working paper 1302, USI Università della Svizzera italiana.
  10. Giuliano Masiero & Massimo Filippini & Matus Ferech & Herman Goossens, 2007. "Determinants of outpatient antibiotic consumption in Europe: bacterial resistance and drug prescribers," Quaderni della facoltà di Scienze economiche dell'Università di Lugano 0702, USI Università della Svizzera italiana.
  11. Massimo Filippini & Giuliano Masiero & Karine Moschetti, 2007. "Characteristics of demand for antibiotics in primary care: an almost ideal demand system approach," Quaderni della facoltà di Scienze economiche dell'Università di Lugano 0701, USI Università della Svizzera italiana.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:taf:applec:v:29:y:1997:i:9:p:1179-1190. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Michael McNulty).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.