Price Sensitivity of Demand for Prescription Drugs: Exploiting a Regression Kink Design

Marianne Simonsen, Lars Skipper and Niels Skipper

Journal of Applied Econometrics, 2016, vol. 31, issue 2, 320-337

Abstract: We investigate price sensitivity of demand for prescription drugs, using drug purchase records for the entire Danish population. We identify price responsiveness by exploiting variation in prices caused by kinked reimbursement schemes and implement a regression kink design. The results suggest some price responsiveness with corresponding price elasticities ranging from −0.2 to −0.7. Individuals with chronic disease and especially individuals above the age of 65 respond less to the price of drugs. Copyright © 2015 John Wiley & Sons, Ltd.

Date: 2016
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Related works:
Working Paper: Price Sensitivity of Demand for Prescription Drugs: Exploiting a Regression Kink Design (2010)
Working Paper: Price Sensitivity of Demand for Prescription Drugs: Exploiting a Regression Kink Design (2010)
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