Defining Relevant Product Markets for Pharmaceuticals

To identify the relevant product markets for Swedish pharmaceuticals, a spatial econometrics approach is employed. First, we calculate Moran’s Is for different market definitions and then we use a spatial Durbin model to determine the effect of price changes on quantity sold off own and competing products. As expected, the results show that competition is strongest between close substitutes; however, the relevant product markets for Swedish pharmaceuticals extend beyond close substitutes down to products included in the same class on the four-digit level of the Anatomic Therapeutic Chemical system as defined by the World Health Organization. The spatial regression model further indicates that increases in the price of a product significantly lower the quantity sold of that product and in the same time increase the quantity sold of competing products. For close substitutes (products belonging to the same class on the seven-digit level of the Anatomic Therapeutic Chemical system), as well as for products that, without being close substitutes, belong to the same therapeutic/pharmacological/chemical subgroup (the same class on the five-digit level of the Anatomic Therapeutic Chemical system), a significant change towards increased competition is also visible after 1 July 2009 when the latest policy changes with regards to pharmaceuticals have been implemented in Sweden.

Geoprocessing journey-to-work data : delineating commuting regions in Dalarna, Sweden

Delineation of commuting regions has always been based on statistical units, often municipalities or wards. However, using these units has certain disadvantages as their land areas differ considerably. Much information is lost in the larger spatial base units and distortions in self-containment values, the main criterion in rule-based delineation procedures, occur. Alternatively, one can start from relatively small standard size units such as hexagons. In this way, much greater detail in spatial patterns is obtained. In this paper, regions are built by means of intrazonal maximization (Intramax) on the basis of hexagons. The use of geoprocessing tools, specifically developed for the processing ofcommuting data, speeds up processing time considerably. The results of the Intramax analysis are evaluated with travel-to-work area constraints, and comparisons are made with commuting fields, accessibility to employment, commuting flow density and network commuting flow size. From selected steps in the regionalization process, a hierarchy of nested commuting regions emerges, revealing the complexity of commuting patterns.