Abstract

Type 1 diabetes mellitus (T1DM) is one of the most common chronic diseases in childhood. Although a classical treatment for T1DM is insulin injections by patients themselves, a new treatment by innovative and effective medical devices, insulin-infusion pumps, has been recently developed. Insulin-infusion pumps are wearable devices that automatically deliver insulin to the patients bodies. However, in Japan, elder patients are reluctant to use this effective devices, Insulin-Infusion pumps. Is this due to the controversial policy that the government stops financial aids for the patients at the age of twenty? Is this simply due to the fact that elder patients are accustomed to the classical treatment?. To evaluate the discontinuity of financial aids, we conduct an original questionnaire to the patients, and estimate the demand function for the new devices. The device demands are regressed on price, income, and socioeconomic status. A problem in the estimation is as follows: while an important explanatory variable, the device price that each patient faces, is observable for the current users, it is in principle unobservable for the non-users. Before the demand function estimation, we employ the Heckman’s two stage method to gain unobservable data of device prices. Our estimation of device demand function reveals that the financial aids are crucial for the use of the device: the stop of the financial aids decreases the device users by 31%. Patients' characteristics are also important: poor, male, single, and long-diseased patients are less likely to demand the devices. In Japan, elder patients are reluctant to use the infusion pumps mainly because of the stop of the financial aids at the age of twenty , which will impair their health in the end. It is also important for diffusing the devices that they provide information to the less informed patients like male and single patients.

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