Medical innovation and social externality

Medical innovation and social externality

Healthcare expenditure in the United States has grown and will continue to increase. The increasing healthcare expenditure is to reduce real income as well as to diminish total utility and increase financial stresses. This study argues that the most critical factor that increases healthcare expenditures during last 50 years has been the advent, adoption and diffusion of new medical technologies...

Induced Innovation and Social Inequality: Evidence from Infant Medical Care.

We develop a model of induced innovation that applies to medical research. Our model yields three empirical predictions. First, initial death rates and subsequent research effort should be positively correlated. Second, research effort should be associated with more rapid mortality declines. Third, as a byproduct of targeting the most common conditions in the population as a whole, induced inno...

Diffusion and social networks: revisiting medical innovation with agents

In this paper, we reanalyze Medical Innovation, the classic study on diffusion of Tetracycline by Coleman, Katz and Menzel (1966). Medical Innovation articulates how different patterns of interpersonal communications can influence the diffusion process at different stages of adoption. In their pioneering study, individual network (discussion, friendship or advice) was perceived as a set of disj...

Innovation Diffusion, Social Networks and Strategic Marketing: Revisiting Medical Innovation with Agents

Medical Innovation Revisited: Social Contagion versus Marketing Effort

This article shows that Medical Innovation—the landmark study by Coleman, Katz, and Menzel—and several subsequent studies analyzing the diffusion of the drug tetracycline have confounded social contagion with marketing effects. The article describes the medical community’s understanding of tetracycline and how the drug was marketed. This situational analysis finds no reasons to expect social co...