In this paper, we estimate how demand for prescription drugs varies with income for a sample of near retirement individuals. The analysis is based on a novel panel data set with information about the purchase of prescription drugs for a large number of Danish individuals over the period 1995–2003. Our preferred model performs better in an external validation test than models that can be estimated on cross section data. Results indicate that demand does respond to variations in income and that reforms affecting income will therefore affect the use of prescription drugs.
Health Economics, 2014, Vol 23, Issue 3
prescription drugs demand; income; near retirement; Faculty of Social Sciences; Care for the elderly; Retirement; Living conditions; Addicts; Societal and employment-related aspects of health