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Does subsidy work? Price elasticity of demand for influenza vaccination among the elderly in Japan

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  • Kondo, Masahide
  • Hoshi, Shu-ling
  • Okubo, Ichiro

Abstract

Objectives Subsidy for influenza vaccination is often provided to the elderly in order to encourage them to receive a flu shot in developed countries. However, its effect on uptake rate, i.e., price elasticity of demand, has not been well studied.Methods Japan's decentralised vaccination programme allows observation of various pairs in price and uptake rate of flu shots among the elderly by the municipality from 2001/2002 to 2004/2005 season. We combine our sample survey data (n = 281), which monitor price, subsidy and uptake rate, with published data on local characteristics in order to estimate price elasticity of demand with panel model.Results We find price elasticity of demand for influenza vaccine: nearly zero in nationwide, nearly zero in urban area, and -1.07 in rural area.Conclusions The results question the rationale for subsidy, especially in urban area. There are cases where maintaining or increasing the level of subsidy is not an efficient allocation of finite health care resources. When organising a vaccination programme, health manager should be careful about the balance between subsidy and other efforts in order to encourage the elderly to receive shots with price elasticity in mind.

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  • Kondo, Masahide & Hoshi, Shu-ling & Okubo, Ichiro, 2009. "Does subsidy work? Price elasticity of demand for influenza vaccination among the elderly in Japan," Health Policy, Elsevier, vol. 91(3), pages 269-276, August.
    • Handle: RePEc:eee:hepoli:v:91:y:2009:i:3:p:269-276
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    1. Acton, Jan Paul, 1975. "Nonmonetary Factors in the Demand for Medical Services: Some Empirical Evidence," Journal of Political Economy, University of Chicago Press, vol. 83(3), pages 595-614, June.
    2. John Mullahy, 1999. "It'll only hurt a second? Microeconomic determinants of who gets flu shots," Health Economics, John Wiley & Sons, Ltd., vol. 8(1), pages 9-24, February.
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    1. Donald A. P. Bundy & Nilanthi de Silva & Susan Horton & Dean T. Jamison & George C. Patton, 2017. "Disease Control Priorities, Third Edition," World Bank Publications - Books, The World Bank Group, number 28876, December.
    2. Huang, Jiechen & Wang, Juan & Xia, Chengyi, 2020. "Role of vaccine efficacy in the vaccination behavior under myopic update rule on complex networks," Chaos, Solitons & Fractals, Elsevier, vol. 130(C).
    3. Ibuka, Yoko & Bessho, Shun-ichiro, 2015. "Subsidies for influenza vaccination, vaccination rates, and health outcomes among the elderly in Japan," Japan and the World Economy, Elsevier, vol. 36(C), pages 56-66.
    4. Saito, Yoko & Aizaki, Hideo & Saito, Hisamitsu, 2022. "Assessing the Consumer Acceptability of Vaccine Rice," Japanese Journal of Agricultural Economics (formerly Japanese Journal of Rural Economics), Agricultural Economics Society of Japan (AESJ), vol. 24.
    5. Shimazawa, Rumiko & Ikeda, Masayuki, 2012. "The vaccine gap between Japan and the UK," Health Policy, Elsevier, vol. 107(2), pages 312-317.
    6. Tomas J. Philipson & George Zanjani, 2013. "Economic Analysis of Risk and Uncertainty induced by Health Shocks: A Review and Extension," NBER Working Papers 19005, National Bureau of Economic Research, Inc.

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