TY  - JOUR
AU  - Moran,John R.
AU  - Simon,Kosali Ilayperuma
TI  - Income and the Use of Prescription Drugs by the Elderly: Evidence from the Notch Cohorts
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 11068
PY  - 2005
Y2  - January 2005
UR  - http://www.nber.org/papers/w11068
L1  - http://www.nber.org/papers/w11068.pdf
N1  - Author contact info:
John R. Moran
604 Ford Building
Department of Health Policy and Administration
Pennsylvania State University
University Park PA 16802
Tel: 315/443-9058
Fax: 315/443-1081
E-Mail: jrm12@psu.edu

Kosali I. Simon
School of Public and Environmental Affairs
Indiana University
Rm 359
1315 East Tenth Street
Bloomington, IN 47405-1701
Tel: (812) 856-3850
E-Mail: simonkos@indiana.edu
AB  - We use exogenous variation in Social Security payments created by the Social Security benefits notch to estimate how retirees' use of prescription medications responds to changes in their incomes. In contrast to estimates obtained using ordinary least squares, instrumental variables estimates based on the notch suggest that lower-income retirees exhibit considerable income sensitivity in their use of prescription drugs. Our estimates are potentially useful for thinking about the health care usage implications of any changes in transfer payments to the elderly that may occur in the future, and for evaluating the benefits of the recently enacted Medicare prescription drug benefit.
ER  -