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Income distribution and consumer demand for health services. The case of prescribed medicines in the USA

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  • Christine Huttin

Abstract

The relationship between pharmaceutical expenditures and income is analysed for a sample of 7981 patients, insured with a private plan extracted from the American National Medical Expenditures Survey. The influence of factors such as health status, characteristics of group versus nongroup health plans and job stability profile on the income effect in the use of prescribed medicine is investigated. It is found that the effect of income on pharmaceutical consumption is negative. Probably clinical and epidemiological factors as well as economic factors are taken into account in a measure such as income; different income groups reflect therefore different patterns of use of pharmaceutical services. The income effect is larger in the case of group plans than nongroup plans. For patients with a poor health status, the positive effect of health insurance on the remaining disposable income seems to lead to positive income effect on pharmaceutical use. Finally a positive income effect on drug use is observed for patients currently employed, who were laid off during the period of the survey, but were confident of acquiring a job. So either positive or negative signs between pharmaceutical use and income were observed for groups of patients with different health status, job stability or type of health plans.

Suggested Citation

  • Christine Huttin, 1997. "Income distribution and consumer demand for health services. The case of prescribed medicines in the USA," Applied Economics, Taylor & Francis Journals, vol. 29(4), pages 497-503.
    • Handle: RePEc:taf:applec:v:29:y:1997:i:4:p:497-503
    DOI: 10.1080/000368497326985
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    References listed on IDEAS

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    1. Huttin, Christine, 1994. "The use of prescription charges," Health Policy, Elsevier, vol. 27(1), pages 53-73, January.
    2. Coulson, N. Edward & Stuart, Bruce, 1992. "Persistence in the use of pharmaceuticals by the elderly : Evidence from annual claims," Journal of Health Economics, Elsevier, vol. 11(3), pages 315-328, October.
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    Cited by:

    1. Begoña Álvarez, 2002. "The use of medicines in a comparative study across European interview-based surveys," Working Papers 0209, Universidade de Vigo, Departamento de Economía Aplicada.
    2. Leo Turcotte & John Robst & Solomon Polachek, 2006. "Medical interventions among pregnant women in fee-for-service and managed care insurance: a propensity score analysis," Applied Economics, Taylor & Francis Journals, vol. 38(13), pages 1513-1525.
    3. Huttin, C. & Andral, J., 2000. "How the reimbursement system may influence physicians' decisions results from focus groups interviews in France," Health Policy, Elsevier, vol. 54(2), pages 67-86, November.
    4. Atella, Vincenzo, 2000. "Drug cost containment policies in Italy: are they really effective in the long-run?: The case of minimum reference price," Health Policy, Elsevier, vol. 50(3), pages 197-218, January.
    5. Christine Huttin, 2000. "A cluster analysis on income elasticity variations and US pharmaceutical expenditures," Applied Economics, Taylor & Francis Journals, vol. 32(10), pages 1241-1247.
    6. Travis Lybbert, 2007. "Polarization & pricing to the rich," Applied Economics Letters, Taylor & Francis Journals, vol. 14(6), pages 389-394.

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