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An Equilibrium Model Estimated on Pharmaceutical Data

Dag Morten Dalen, Marilena Locatelli () and Steinar Strøm
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Dag Morten Dalen: BI Norwegian School of Management

Atlantic Economic Journal, 2018, vol. 46, issue 3, 281-296

Abstract: Abstract The purpose of this paper is to estimate patients’ and doctors’ responses to prices when making a choice between brand name products and generics. We account for the response of pharmacies to government regulation and to prices set by brand name producers. The data from the Norwegian Prescription Database are unique in the sense that we observe prices set by pharmacies as well as by producers. Our results confirm that estimating only the demand side yields biased estimates of consumers’ price responses. We find much stronger price responses when demand and supply are jointly estimated.

Keywords: Pharmaceuticals; Discrete choice model; Market equilibrium; C35; D43; I18; L11; C10; D00; I00 (search for similar items in EconPapers)
Date: 2018
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Working Paper: An equilibrium model estimated on pharmaceutical data (2015) Downloads
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