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Effect of Economy and FDA Intervention on the Hearing Aid Industry

Amlani, Amyn M. and De Silva, Dakshina G. (2005) Effect of Economy and FDA Intervention on the Hearing Aid Industry. American Journal of Audiology, 14 (1). pp. 71-79. ISSN 1558-9137

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Abstract

Purpose: The purpose of this study was to examine the effects of the economy and the Food and Drug Administration's (FDA) intervention on the hearing aid industry. Method: A 3-stage least squares regression technique was used to analyze the hearing aid market. Results: Our results show that, while recessionary periods reduced both demand and supply, the demand side of the hearing aid industry is significantly more responsive to changes in the economy. Further, the demand function within the hearing aid industry is inelastic. Finally, negative media coverage from nationally televised reports during the FDA's intervention between the 2nd quarter of 1993 and the 3rd quarter of 1994 did not significantly affect the market demand of hearing aids. Conclusions: The demand for hearing aids increases in a flourishing economy and decreases during periods of recession. The negative media campaign from the FDA's intervention between the 2nd quarter of 1993 and the 3rd quarter of 1994 had essentially little effect on the end user. The repercussions of the FDA's intervention have resulted, however, in a reduction in the market supply of hearing aids and an increase in their cost due to manufacturer-sponsored clinical trials.

Item Type: Article
Journal or Publication Title: American Journal of Audiology
Uncontrolled Keywords: Food and Drug Administration ; economy ; law of demand ; law of supply ; elasticity
Subjects: UNSPECIFIED
Departments: Lancaster University Management School > Economics
ID Code: 52469
Deposited By: ep_importer_pure
Deposited On: 07 Feb 2012 16:57
Refereed?: Yes
Published?: Published
Last Modified: 09 Apr 2014 23:03
Identification Number:
URI: http://eprints.lancs.ac.uk/id/eprint/52469

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