Estimating Price Elasticities of Convalescent Care Programs

Abstract

This study is the first to estimate price elasticities of demand for convalescent care programmes. In 1997, the German legislature more than doubled the daily co-payments for the publicly insured from €6 to €13. The measure caused the overall demand for convalescent care treatments to fall by 20 to 25%. I estimate the price elasticity for medical rehabilitation programmes aimed at preventing work disability to be about −0.3, whereas the elasticity for medical rehabilitation programmes for recovery from accidents at work lies around −0.5. The demand for preventive treatment at health spas is elastic and less than −1.