Key Words: Knowledge economy, Demand for labour, Knowledge and technology Estimation of Price and Income Elasticities of Demand for Health Services Using AIDS Model

Abstract

The purpose of this paper is to answer the following question: Is estimate the price and income elasticites of the demand for health services in Iran elastic?. This researchWe use has used the Almost Ideal Demand System (AIDS) model. AIDS model using the household expenditure data for the three subsections of medicine, user fees for doctors' and fees and hospitals ization services for three income groups for thein the period 1971 – 2001. One conclusion isOur results indicate that, the health services should be considered as aare necessity for all income groups. In this case, cross elasticities showed and that hygiene and/or mMedical services have complimentary relations with cloths and shelter. Price elasticitiesy of hospitalization for low, medium, and high income groups was are low: -0.52, -0.53 and -0.62, respectively. These results indicate of low elasticity of hospitalization services for all income groups and this issue Overall, we conclude that the confirms that elasticity for health services is low in Iran.

Keywords

• price elasticity of demand
• income elasticity of demand
• almost ideal demand system (aids)