Volume 13, (Supplement) 1978
Feldman, Roger, and James W. Begun. 1978. "The Effects of Advertising - Lessons from Optometry." Journal of Human Resources 13(S):247-262.
We examine the effect of advertising bans on the price of optometric examinations. Advertising is viewed as an information medium which enables consumers to search for lower prices, to the relative disadvantage of high-cost, low-volume sellers. Self-interest leads these sellers to support bans on advertising. An empirical section shows that price is 16 percent higher in states that ban optometric and optician price advertising, when examination length, procedures, and office equipment are held constant. The two advertising bans work by interaction--both must be present to raise significantly the price of eye examinations.
Feldman is in the Center for Health Services Research and the Department of Economics, University of Minnesota, and Begun is in the Department of Community Medicine and Hospital Administration, University of North Carolina at Chapel Hill. Data analyzed in this study were collected under grant #1ØR3ØHS2371-01 from the National Center for Health Services Research, U.S. Department of Health, Education, and Welfare.
© 2003 by the Board of Regents of the University of Wisconsin System
US ISSN 0022-166X