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Econ 3004 / 6039 Health Economics Week 2 Tutorial Solutions
发布时间：2022-08-30
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Econ 3004 / 6039 Health Economics*
Week 2 Tutorial Solutions
Question 1: Textbook Chapter 2, Q11.
(a) With the data from the question, the arc price elasticity of demand in
Japan is as follows
(Q1 一 Q2 )/(Q1 + Q2 )
(P1 一 P2 )/(P1 + P2 )
1e25 一 1e5 10 + 20
= 20 一 10 . 1e25 + 1e5
= 一0e273
(b) The demand at a city can be
Q = a 一 bP + I.
where I is the income. Since the income in Tokyo is higher than the income in Hokkaido, patients in Tokyo have a higher demand than those in Hokkaido.
Thus the actual demand is less steep (more elastic) than what we plot from the data. So u1 underestimates the actual price elasticity (in absolute value).
(c) In Tokyo, as price increases from 20 to 30, it means a 50% increase of price.
Without other information, we have to use u1 as the price elasticity for Tokyo. Then 50% . u1 = 一13e7%. So the patient volume goes down from 1.25 visits per month to 1.08 visits per month.
In Hokkaido, there is a 50% decrease of price. Using u1 , we can calculate that the patient volume goes up from 1.5 visits per month to 1.71 visits per month.
(d) Only using the Year 2000 information, the elasticity at Japan is
1 一 1e2 30 + 15
(e) Using the two yearsíinformation, the price elasticity at Tokyo is
1 一 1e25 30 + 20
The price elasticity at Hokkaido is
uH = 15 一 10 . 1e2 + 1e5 = 一0e556e
(f) In Tokyo, the price increases from 30 to 60, which is a 100% price in- crease. Using uT calculated in part (e), the patient volume will change by 100% . (一0e556) = 一55e6%. So based on the Year 2000 patient volume, there will be 0.444 visit per month in Tokyo in 2001.
(g) Using the population in each city as the weight, we will have a weighted average price elasticity of demand for Japan:
uT + 
uH = 一0e556e
Question 2: Textbook Chapter 2, Q12.
(a) Since people may not be fully aware of its beneÖt, the preventive care seems more like an optional medical care. As a consequence, in comparison with the inpatient care, people will be more sensitive to price changes of the preventive care.
(b) The data show that quantity demanded goes down as copayment (price) goes up. This is consistent with the conjecture in part (a).
