The Demand for Pediatric Care: An Hedonic Approach

Abstract

The model that we develop is used to analyze properties of the demand functions for quantity and quality. It is then applied to study the demand for pediatric care -- physicians' services rendered to children.2The theoretical model of quantity -- quality substitution provides a frame-work for demand analysis whenever the market for a good is distinguished by a quality component. The analysis is developed within the household production framework of consumer behavior and assumes that parents both demand and produce quality children, where children's health is one aspect of their quality. Thus, the demand curves for pediatric care are derived from the interaction between the demand and production functions of children's health. In the analysis, we emphasize the effects of income, the price of pediatric services, and the time costs of obtaining these services on the quantity (measured in terms of visits) and quality of services demanded.