ERIC Number: EJ746501
Record Type: Journal
Publication Date: 2006
Reference Count: N/A
Income and the Use of Prescription Drugs by the Elderly: Evidence from the Notch Cohorts
Moran, John R.; Simon, Kosali Ilayperuma
Journal of Human Resources, v41 n2 p411-432 Spr 2006
We use exogenous variation in Social Security payments created by the Social Security benefits notch to estimate how retirees' use of prescription medications responds to changes in their incomes. Using data from the 1993 Wave of the AHEAD, we obtain instrumental variables estimates of the income elasticity of prescription drug use that are uniformly above one, with a middle estimate of 1.32. Simulations based on our estimates suggest that reductions in Social Security benefits similar to those incorporated in recent reform proposals would significantly reduce prescription drug use among the elderly.
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Publication Type: Journal Articles; Reports - Descriptive
Education Level: N/A
Authoring Institution: N/A