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Pricing in vitro fertilization procedures
Author(s) -
Dukes Anthony J.,
Tyagi Rajeev K.
Publication year - 2009
Publication title -
health economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.55
H-Index - 109
eISSN - 1099-1050
pISSN - 1057-9230
DOI - 10.1002/hec.1439
Subject(s) - welfare , incentive , social welfare , fertility , economics , microeconomics , in vitro fertilisation , business , actuarial science , public economics , medicine , environmental health , biology , political science , population , embryo , law , market economy , microbiology and biotechnology
This paper examines the economics of pricing practices at artificial reproductive clinics, which have introduced money‐back guarantees (MBGs) for in vitro fertilization. We identify incentives for clinics to offer MBGs and evaluate the impact on couples' choices and on social welfare. Introducing MBGs allows a clinic to (i) segment couples simultaneously on their relative fertility and on risk preferences; (ii) offer quantity discounts to relatively infertile couples; and (iii) offer some risk‐sharing to couples for this costly procedure, whose outcome is uncertain. Our results also show how the addition of MBGs can affect the overall social welfare. Copyright © 2009 John Wiley & Sons, Ltd.