Time prices and the demand for GP services
This paper analyzes the effects of time prices on the demand for general practitioner (GP) services. Where data on earnings per unit of time was not available, an alternative method was used to impute the value of time. Separate elasticities were estimated using interactive dummy variables for individual employment status. Furthermore, a distinction was made between patient-initiated and physician-initiated visits to a GP. The results show that the probability of a patient-initiated visit is negatively influenced by the time required, for 4 of the 6 employment status categories defined. For a subsample, time was valued on the basis of earnings per time unit. The resulting time price was found to have a significant negative impact on the probability of a patient-initiated visit to a GP. However neither time nor time prices have any effect on the probability of a physician-initiated visit. It can therefore be concluded that time prices are a relevant factor in the determination of demand for GP services, particularly if it is the patient who is making the decision. Ignoring time prices could result in the mis-specification of demand equations, obtaining biased results from statistical analyses and wrongly assessing policy implications.
Volume (Year): 34 (1992)
Issue (Month): 7 (April)
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