Department of Economics and Business Economics

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

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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.
Original languageEnglish
JournalJournal of Applied Econometrics
Pages (from-to)320-337
Publication statusPublished - 2016

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