The Market for High-Quality Medicine: Retail Chain Entry and Drug Quality in India

• 成果类型: Review
• 署名作者: Bennett, Daniel; Yin, Wesley
• 署名单位: University of Southern California; University of California System; University of California Los Angeles
• 刊物名称: REVIEW OF ECONOMICS AND STATISTICS
• ISSN/ISSBN: 0034-6535
• DOI: 10.1162/rest_a_00758
• 发表日期: 2019-03
• 页码: 76-90
• 关键词: monopolistic competition; product quality; price; INFORMATION; inference; attitudes; selection

摘要

This study examines the effect of chain store entry on drug quality and prices in India. In contrast to prevailing mom-and-pop pharmacies, chains exploit scale economies in distribution and signaling to offer high-quality drugs at lower cost. We show that chain entry leads to a 5% improvement in drug quality and a 2% decrease in prices at incumbent retailers. Effects are larger for locally distributed drug brands but do not depend on consumer SES. Our findings suggest that in markets with asymmetric information, organizational technologies such as chains can play an important role translating market expansion into higher quality.