Restoring Vision to Consumers and Competition to the Marketplace: Analyzing the Effects of Required Prescription Release

24 Pages Posted: 27 Apr 2018

See all articles by Edward Timmons

Edward Timmons

Saint Francis College - School of Business

Conor Norris

George Mason University

Multiple version iconThere are 2 versions of this paper

Date Written: February 27, 2018

Abstract

Occupational licensing laws can allow professionals to extract rents in the marketplace. In the case of vision services, optometrists have the authority to write prescriptions for contact lenses. Optometrists may choose to conceal this information and force patients to purchase lenses from the professional writing the prescription—resulting in vendor lock-in. In this paper, we investigate the possible effect of the 2004 Fairness to Contact Lens Consumers Act (FCLCA) on the market for vision services by examining state differences in prescription release mandates before 2004. We find that requiring professionals to release prescription information to patients resulted in a 10 to 11 percent reduction in the wages of optometrists. Our results provide some evidence that the FCLCA may have increased consumer welfare by reducing the prices of contact lenses or increasing access to contact lenses.

Keywords: occupational licensing, lock-in, healthcare, optometry

JEL Classification: 44

Suggested Citation

Timmons, Edward and Norris, Conor, Restoring Vision to Consumers and Competition to the Marketplace: Analyzing the Effects of Required Prescription Release (February 27, 2018). Available at SSRN: https://ssrn.com/abstract=3169418 or http://dx.doi.org/10.2139/ssrn.3169418

Edward Timmons (Contact Author)

Saint Francis College - School of Business ( email )

PO Box 600
Loretto, PA 15940
United States

Conor Norris

George Mason University ( email )

4400 University Drive
Fairfax, VA 22030
United States

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