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Price elasticity

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Prices And Social Behavior: Evidence From Adult Smoking In Canadian Aboriginal Communities, Jesse A. Matheson Dec 2014

Prices And Social Behavior: Evidence From Adult Smoking In Canadian Aboriginal Communities, Jesse A. Matheson

Jesse A Matheson

This paper provides estimates of tobacco price elasticity explicitly distinguishing between two price effects: the direct effect, reflecting individual reaction to a price change, and the indirect effect, whereby price influences the individual by changing community smoking behavior. Canada's Aboriginal communities are small and secluded, allowing for plausible identification of reference groups on a relatively large scale. Estimates suggest a 10 percent increase in price decreases daily smoking by 0.91 percentage points (2.11 percent), occasional smoking by 1.24 percentage points (8.27 percent) and average smoking intensity by 0.15 cigarettes per day (2.9 percent). It is found that the indirect effect …

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Workers On The Margin: Who Drops Health Coverage When Prices Rise?, Edward Okeke, Richard Hirth, Kyle Grazier Dec 2009

Workers On The Margin: Who Drops Health Coverage When Prices Rise?, Edward Okeke, Richard Hirth, Kyle Grazier

Edward Okeke

We revisit the question of price elasticity of employer-sponsored insurance (ESI) take-up by directly examining changes in the take-up of ESI at a large firm in response to exogenous changes in employee premium contributions. We find that, on average, a 10% increase in the employee’s out-of-pocket premium increases the probability of dropping coverage by approximately 1%. More importantly, we find heterogeneous impacts: married workers are much more price-sensitive than single employees, and lower-paid workers are disproportionately more likely to drop coverage than higher-paid workers. Elasticity estimates for employees below the 25th percentile of salary distribution in our sample are nearly …

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