Question

1. What factors would you use to estimate the level of demand for medical care for the typical individual? How would your choice of variables differ if you were estimating demand for an entire country?

Answer 1

From the term medical care its quite clear medical not only includes the cost of medicines, but rather hospitals,nurses(staff), technology used, professional doctors.

So, carrying forward to it it, a very broad viewpoint varying on individuals and their needs, firstly, going for determinants that affect demand for medical care for individuals are :

1.income of the consumer(income of consumer matters as 80% of medical expenses borne by consumers are oop payments i.e. out of pocket expenses) , so instead of being a necessity people spend wisely on medical expenses, because in a rural farm with lower earnings an individual firstly focuses on feeding his belly with atleast 2 meals. Therefore, income of consumers does matter for medical expenses.

2. pricing of good ( An individual with earnings low or high, always sees the price of good before buying it ,whatever the type of good be, so in the case of medical good ,yes price of good matters but with less weightage as compared to other basic consumer goods.

3.Price of alternative goods ( covering up both substitutes and complimentary goods)

4.Time ( Can the consumption of good be postponed)

5.Stage of illness (Supposedly, a person i suffering from cancer and is at its last stage, so for that person spending on medicine is life saving good, thus he must at that moment ignore the price and have the good)

6.Results of medical care facilities(If the consumption of medical care facilities assure you with great results i.e. healing the wounds, or eliminating the disease, relief from pain, life saving chance )

7.Advertisement Effect  

8.Consumer Confidence

9.Unemployment/wages

secondly, focusing on the factors influencing demand for country:-

1.Growth of Population

2.Government policy (Expenditure on medical facilities)

3.Any global summit or interaction

4.Composition of population

5. Budget

6.Health indicators of country

7.Goals of the country

8.Country competitivness