The proposed study will estimate 3 fundamental economic properties of the demand for CAM, adopting well-established economics theories and empirical studies on mainstream medicine use. In particular, we propose to empirically investigate how racial and ethnic groups respond differently to economic variables in the market using a nationally representative data set.
The specific aims are:
Specific Aim 1 : To estimate the price elasticity of demand for CAM visits, the cross-price elasticity between CAM and mainstream medicine (MSM) visits and the income elasticity (IE) of CAM visits.
Specific Aim 2 : To establish racial and ethnic differences in the price elasticity of demand, cross-price elasticity (CAM/MSM) and income elasticity. The Medical Expenditure Panel Survey 1996 and 1998 will be used. The empirical model is derived based on a theoretical economics model of demand for health and health care. The price elasticity of demand for CAM visits estimates how responsive patients are to price in CAM use. The cross-price elasticity between CAM and mainstream medicine visits establishes the economic substitution or complementarity of CAM and MSM. The income elasticity (IE) investigates whether CAM is an inferior (IE<0), necessity (0
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