PT  - JOURNAL ARTICLE
AU  - Moran, John R.
AU  - Simon, Kosali Ilayperuma
TI  - Income and the Use of Prescription Drugs by the Elderly
AID  - 10.3368/jhr.XLI.2.411
DP  - 2006 Mar 31
TA  - Journal of Human Resources
PG  - 411--432
VI  - XLI
IP  - 2
4099  - http://jhr.uwpress.org/content/XLI/2/411.short
4100  - http://jhr.uwpress.org/content/XLI/2/411.full
SO  - J Hum Resour2006 Mar 31; XLI
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. Using data from the 1993 Wave of the AHEAD, we obtain instrumental variables estimates of the income elasticity of prescription drug use that are uniformly above one, with a middle estimate of 1.32. Simulations based on our estimates suggest that reductions in Social Security benefits similar to those incorporated in recent reform proposals would significantly reduce prescription drug use among the elderly.