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

Christine Huttin

Applied Economics, 1997, vol. 29, issue 4, 497-503

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.

Date: 1997
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DOI: 10.1080/000368497326985

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