Price elasticity of demand for new and recurring opioid prescriptions

Objective: Several U.S. states have recently enacted excise taxes to curb prescription opioid use and other states are considering similar measures. We assessed the effects of increasing out-of-pocket costs (OPC) on new and recurring opioid fills. Methods: We conducted a retrospective cohort study of opioid-naive individuals presenting with acute back pain using data from a nationwide claims repository. We estimated the effect of OPC on the initiation of opioid treatment in logistic regressions, controlling for socio-demographics, medical history, healthcare utilization, insurance type, and region. With the same covariates plus morphine milligram equivalents and days supplied, we estimated the effect of OPC on the number of opioid fills in negative binomial regressions. We report the price elasticity of demand (PED) for prescription opioids, defined as the percentage change in outcome resulting from a two-fold increase in OPC. Results: Of 25,531 adults diagnosed with acute back pain in Q1 of 2018, 2,451 (9.6%) filled at least one opioid prescription. In multivariable regression, the association between OPC and initiating opioid treatment was not significant (PED= -1.9%; 95% CI: -5.5%, 1.7%). However, by region, the PED was -10.3% (95% CI: -18.1%, -2.4%) in the coastal states and 1.6% (95% CI: -2.5%, 5.7%) in the central-southern states. The PED for the number of prescription fills was -3.7% (95% CI: -7.3%, -0.1%), which also differed by region. In the coastal states, the PED was -15.2% (95% CI: -24.7%, -5.7%) and in the central-southern states -1.5% (95% CI: -5.4%, 2.4%). Conclusions: Opioid fills were price sensitive in the coastal states but not in the central-southern states. Policies that would increase OPC might have a restraining effect on opioid consumption in parts, but not all of the U.S.

Estimating the price elasticity of demand for cigarettes in South Africa using the Deaton approach

ObjectiveTo estimate the price elasticity of demand for South Africa and thereby contribute to growing the evidence base of the likely impact of excise taxes on cigarette demand in low-income and middle-income countries.MethodsWe employ the Deaton method, using wave 5 data from the South African National Income Dynamics Study, to estimate the cigarette price elasticity for South Africa. We used a sample of 6820 households.ResultsOf the 6 820 households in the sample for which we had sufficient data, 1341 (19.7%) spent money on tobacco. The price elasticity of demand for cigarettes is estimated at −0.86 (95% CI −1.37 to −0.35), implying that the demand for cigarettes in South Africa declines by 8.6% for every 10% increase in price.ConclusionThe negative price elasticity estimate for South Africa indicates that increases in the excise tax are particularly effective in controlling cigarette consumption. However, given the presence of a significant illicit tobacco market in the country, it is important that authorities augment tax measures with strategies that curb the illicit trade in cigarettes.

An Analysis of the Income and Price Elasticity of Demand for Housing in View of Price Dynamics on the Residential Property Market

In both the global and the domestic approach, the real estate market is a multifaceted domain of study, constituting a specific and imperfect system. Researchers have to rely on increasingly advanced analytical tools to capture the structural complexity of real estate markets. Real estate prices are influenced by contradictory behaviors of market participants. This observation prompted the authors to analyze the income and price elasticity of demand for housing by calculating elasticity coefficients in view of changes in housing prices and the Veblen effect. This problem was analyzed based on a review of the literature and the results of an experiment. The results of the current study can be used to confirm the presence of the Veblen effect on the housing market based on the adopted criteria. The coefficients of price and income elasticity of demand for housing were calculated in view of the price dynamics on the real estate market to paint a more complete picture of reality and explain market processes.

Price elasticity of demand for cigarettes among youths in high-income countries: a systematic review

Aims: Smoking in youth remains a major public health issue. As increasing tobacco prices is considered one of the most effective prevention strategies, examining youth’s responsiveness to price changes on cigarettes will provide crucial knowledge. This study aims systematically to review research examining the price elasticity of demand for cigarettes among youths (<30 years of age) in high-income countries. Methods: Searches were conducted in three databases (Web of Science, Pubmed and Scopus). Inclusion criteria were publications within the past 10 years (2011–2021) written in English and with a population of youths below 30 years of age, concerning price elasticity of demand for cigarettes and from high-income countries. Searches were screened by two independent reviewers and the quality of studies was assessed using a quality assessment tool. Results: Four outcomes related to price elasticity of demand for cigarettes were examined in six studies included in this review; that is, cigarette initiation, consumption, prevalence and cessation. Overall, findings indicate that increasing tobacco prices affect youth tobacco use. The effect was associated with gender and age; young women were more price sensitive concerning smoking initiation, whereas young men were more price sensitive concerning cigarette prevalence and consumption. Moreover, younger age was associated with higher price elasticity. Conclusions: Estimates for price elasticity varied across the included studies. This may be caused by differences in data sources, collection methods used and country of origin. Most included studies were of older date. Therefore, to make reliable predictions of the expected effects of increased tobacco prices, further examinations of up-to-date and locally embedded measures are required.

Gross Margin, Gross Profit and the Price Elasticity of Demand

Low gross margin can predict failure. High gross margin increases the odds of superior profits. A company’s gross margin is the weighted average gross margin of its products. The easiest way to change a company’s gross margin is to focus on products with a low, zero or negative gross margin. The temptation might be to simply discontinue these products. A better alternative is to consider whether a product can be repriced to improve gross margin and gross profit.Raising price reduces demand based on a product’s price elasticity. Academic articles on price elasticity tend to employ calculus and statistics that are beyond the skill of the individuals who actually make pricing decisions. The contribution of this article it is to provide a clear, simple means of identifying a price point that maximizes product gross profit considering unit cost and the price elasticity of demand.