An empirical analysis of habit and addiction to antibiotics

Because of bacterial resistance, current antibiotic consumption is reinforced by past use, and future utility is lower. The purpose of this article is to provide evidence on habit and addictive behavior toward antibiotics by exploring variations in the average consumption of antibiotics across 20 Italian regions. Using a balanced panel dataset (2000-2009), we estimate myopic and rational addiction models in which antibiotic consumption depends upon demographic and socioeconomic characteristics of the population, the supply of health care in the community, antibiotic price, and the “capital stock”of endogenous bacterial resistance measured by past and future consumption. Our empirical evidence shows that past antibiotic consumption stimulates current consumption and is also consistent with the rational addiction hypothesis. The low price elasticity of antibiotic demand suggests that policy measures targeted at antibiotic co-payments may not be e¤ective in controlling antibiotic consumption. There is scope for other policy interventions, such as incentives and information campaigns targeted at doctors. Keywords: Antibiotic consumption, bacterial resistance, dynamic model, rational addiction. JEL classi…cation: C21, C23, I1 Department of Economics, University of Lugano; ETH, Zurich, Switzerland. yDepartment of Economics and Technology Management, University of Bergamo, Italy; Department of Economics, University of Lugano, Switzerland. Corresponding author. Tel.: +41 058 666 4731; fax: +41 058 666 4733. E-mail address: [email protected].