Regulation, imperfect competition, and the U.S. abortion market

There is a newly published paper by Andrew Beauchamp:

The U.S. abortion market has grown increasingly concentrated recently, while many states tightened abortion laws. Using data on abortion providers, I estimate an equilibrium model of demand, price competition, entry and exit, to capture the effect of regulation on industry dynamics. Estimates show regulations played an important role in determining the abortion market structure and evolution. Counterfactual simulations reveal increases in demand-aimed regulation were the most important observed factor in explaining recent abortion declines. Simulating Utah’s regulatory regime nationally shows tightening abortion restrictions can increase abortions in equilibrium, mainly through tilting the competitive landscape toward low-price providers.

There are ungated versions here, and for the pointer I thank the excellent K.

Comments

"Abortion market". Whatever the position, could we agree that those two words are appalling one next to the other?

Should they be free?

It's at least as correct as "abortion clinic".

Or "Christian politician", if you're going to let your flag show

If abortion is legal and someone (such as government) is not a monopoly provider, then wouldn't one expect a market to exist for it?

If euthanasia on demand becomes legal (aka "right to die") then I'd expect a market in that as well. Just as there is now a market in funeral services.

If your argument is that it should be unlawful to provide such services, then make that argument. If not, how else would you expect such services to be delivered?

The euthanasia market would be measured in helium canisters rented without any party goods. Painless, effective, and legal, but quite wasteful of an expensive product even though subsidized by the Federal government for military purposes until the 90s.

A less wasteful and cheaper alternative would be renting small canisters of nitrogen at party stores, as doing so at drug stores would be too obvious.

I'm wondering if/when TC will offer his own comments on Planned Parenthood. It seems like he is uncharacteristically uninterested with anything having to do with abortion.

it's not as though anyone is clamoring to hear Tyler's opinion on appendectomies. perhaps to him it's just not a particularly morally fraught procedure.

I agree with @UncleMartyPants.

Tyler is dancing around this one. Unfortunately.

It's possible he really doesn't have a strong opinion on it. Libertarianism doesn't seem to provide an obvious answer. You can be a libertarian and think abortion is basically murder, and therefore ought to be illegal. Or you can be a libertarian and think abortion is basically a cosmetic procedure like ear-piercing, and therefore ought to be just fine. It's probably hard to be a libertarian and think abortion ought to be subsidized, but that's as far as it goes. Libertarianism doesn't provide much moral intuition here.

Cowen is not a libertarian, and has stated before that he is pro-life.

"Cowen is not a libertarian"

I had the impression he thought he was, though I wasn't very sure of that. It probably reveals more about me than him, but I think of him as being vaguely center-left.

"and has stated before that he is pro-life."

I have to admit that surprises me.

My comment still stands, if you overlook its applicability: there's no obvious libertarian position on abortion.

Cowen also thinks he is an intellectual, despite all evidence to the contrary.

I don't recall Tyler saying he was pro-life, at least I wouldn't interpret this post as such: http://marginalrevolution.com/marginalrevolution/2009/03/ross-douthat-and-social-policy.html . It seems more like a call for more agnosticism to me.

Just another lump of tissue with organs, feet and toes, brains and livers. And a thriving market yearning for these bits and pieces.

So, the claim is that a tighter regulatory regime can lower the cost to the end user as well as increase supply? Seems dubious in abstract, but if so, shouldn't pro-choice people be favoring Utah's regulations then?

Demand curves slope upward!

Uh, no.

Differently put: ban abortions, and women resort to back alleys.

There is reason many of us brandish coat hangers at Pro-Choice rallies.
http://articles.latimes.com/2014/mar/25/news/la-ol-the-coat-hanger-symbol-of-dangerous-preroe-abortions-is-back-20140324

Same reason anti-abortionists wave around placards of fetal tissue? To disgust whoever's watching?

Perhaps, but that hardly seems consistent with the idea that there would be *more* abortions. I'm familiar with the "people will get just as many abortions as before, only they'll be dangerous" argument. It at least seems consistent and plausible enough even if I'm unsure that demand would work precisely that way.

I mean, the study claims that if abortions were cheaper, women would get more of them than they do now, and that Utah's regulatory regime will make them cheaper by encouraging the Wal-Mart of abortion to appear. That's completely inconsistent with the idea that "if abortions are harder to get, then people will get just as many as before only more dangerous." If they're cheaper, then it's not even clear that it's arguing that abortions will be harder to get.

Note also that the study claims that the decline in the US abortion rate is mostly because of demand-based abortion restrictions, which also contradicts your back alley model, in at least the zero effect on demand version.

I'm not clear that supply itself is increased. Regulations say things like you have to have this or that machine, be so close to a hospital etc. A large provider can afford that, smaller ones cannot. As a result the large provider can become bigger due to the added business and drop down in terms of economies of scale.

Essentially you're talking about Wal-Mart, which drivers others out of business AND increases supply and lowers prices at the same time.

The supply of abortions provided is increased, clearly, according to this summary. The price of abortions decreases and the quantity supplied at that lower price is higher in equilibrium.

The study claims that restrictions have decreased the number of abortions, but that certain regulatory regimes, like Utah's, might do the equivalent of forcing mom-and-pop shops out of business and make way for the Wal-Mart of abortion.

Anyone who believes this should be strongly sympathetic to the arguments in favor of Certificates of Need in the medical field.

Abortion really bothers me, but it's a woman's body and no one should ever have the right to force her to go to term.

Infanticide really bothers me, but it is a parent's life and no one should ever have the right to force them to feed, clothe, or shelter a child for 18 years.

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