James W. Begun

The effects of advertising--lessons from optometry.

We examine the effect of advertising bans on the price of optometric examinations. Advertising is viewed as an information medium which enables consumers to search for lower prices, to the relative disadvantage of high-cost, low-volume sellers. Self-interest leads these sellers to support bans on advertising. An empirical section shows that price is 16 percent higher in states that ban optometric and optician price advertising, when examination length, procedures, and office equipment are held constant. The two advertising bans work by interaction--both must be present to raise significantly the price of eye examinations.

The Welfare Cost of Quality Changes Due to Professional Regulation

We present a method for measuring the welfare cost of legislated restrictions on the activities of professionals in markets where consumers can substitute between brands of different quality. In the market for vision examinations by optometrists, quality changes due to three selected professional regulations result in economic profits for producers of some

Studies in everyday medical life

140 million, and positive changes in quality due to the regulations are not valued by consumers at their marginal cost. A small annual welfare loss of about

DOES ADVERTISING OF PRICES REDUCE THE MEAN AND VARIANCE OF PRICES

8 million results from these professional regulations. When quantity effects are also included, the welfare loss increases to

Occupational Regulation in the States: A Causal Model

16 million.