The economics of birth control

at 12:37 PM ET, 02/20/2012

Marginal Revolution flags recent research that sheds light on how pricing effects women’s use of contraceptives. In 2007, changes to pharmaceutical regulations put an end to a common practice of manufacturers selling contraceptives at a discount price to college health centers. Prices for birth control on campuses, as you can see in the chart above, subsequently spiked. Student usage of contraceptives declined slightly, and did not result in an increase in accidental pregnancy:

We find that the three- to ten-fold increase in the price of the Pill reduced the use of oral contraception by 1 to 1.8 percentage points, on average, or 2 to 4 percent, among college women. These findings are consistent with previous literature that documents small price elasticities for contraception in other contexts.
We also find evidence that the reduction in the use of the Pill was significantly stronger for women without health insurance, women with credit card debt, and older women. We find some evidence of substitution towards non-prescription birth control methods and emergency contraception among those same women, as well as a reduction in the number of sexual partners, particularly among frequent sex participants. We find minimal evidence of changes in STI infection or accidental pregnancy.

Read the full paper here. It’s worth noting that this paper only looks at women’s use of oral contraceptives, not other forms of birth control that can be significantly more expensive.

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