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Advertising And The Price, Quantity And Quality Of Primary Care Physician Services

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Author Info

  • RIZZO, J.A.
  • ZECKHAUSER, R.J.

Abstract

Physician advertising has increased dramatically during the past decade, and this trend seems likely to continue. This paper examines the impact of such advertising on the price, quantity, and quality of primary care physician services. Unlike earlier research on the effect of advertising in the professions, our study attempts to control for possible selection effects. The results suggest that physicians may advertise in order to obtain more desirable (for example, wealthier and less price-sensitive) patients. Consistent with this view, we find that advertising leads to higher price and quality (the latter measured as time spent per patient office visit) and lower total patient visits. Had we not controlled for selection effects, advertising would appear to have lowered the price of physician services significantly. The results of this study suggest that future research on the price effects of advertising should control for potential selection factors.

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Bibliographic Info

Paper provided by Harvard - J.F. Kennedy School of Government in its series Papers with number 180d.

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Length: 45 pages
Date of creation: 1989
Date of revision:
Handle: RePEc:fth:harvgo:180d

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Postal: HARVARD UNIVERSITY JOHN FITZGERALD KENNEDY SCHOOL OF GOVERNMENT; CAMBRIDGE, MA 02138.
Fax: 617-496-2554
Web page: http://www.hks.harvard.edu/
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Related research

Keywords: advertising ; physicians ; prices ; health economics ; health services;

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Cited by:
  1. Hendrik J├╝rges & Vincent Pohl, 2012. "Medical guidelines, physician density, and quality of care: evidence from German SHARE data," The European Journal of Health Economics, Springer, vol. 13(5), pages 635-649, October.
  2. Gaynor, Martin, 1994. "Issues in the Industrial Organization of the Market for Physician Services," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 3(1), pages 211-55, Spring.
  3. B. Wolfe & S. Zuvekas, . "Nonmarket outcomes of schooling," Institute for Research on Poverty Discussion Papers 1065-95, University of Wisconsin Institute for Research on Poverty.
  4. Mitchell, Jean M. & Sass, Tim R., 1995. "Physician ownership of ancillary services: Indirect demand inducement or quality assurance?," Journal of Health Economics, Elsevier, vol. 14(3), pages 263-289, August.
  5. Barbara L. Wolfe & Robert H. Haveman, 2002. "Social and nonmarket benefits from education in an advanced economy," Conference Series ; [Proceedings], Federal Reserve Bank of Boston, vol. 47(Jun), pages 97-142.
  6. Stivers, Andrew & Tremblay, Victor J., 2005. "Advertising, search costs, and social welfare," Information Economics and Policy, Elsevier, vol. 17(3), pages 317-333, July.
  7. Camille Chaserant & Sophie Harnay, 2013. "The regulation of quality in the market for legal services: Taking the heterogeneity of legal services seriously," European Journal of Comparative Economics, Cattaneo University (LIUC), vol. 10(2), pages 267-291, August.

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