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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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For corrections or technical questions regarding this item, or to correct its listing, contact: (Thomas Krichel).

Related research

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

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Cited by:
  1. Martin Gaynor, 1995. "Issues in the Industrial Organization of the Market for Physician Services," NBER Working Papers 4695, National Bureau of Economic Research, Inc.
  2. 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.
  3. 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, issue Jun, pages 97-142.

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