Effects of economy and FDA intervention on the hearing aid industry.
OBJECTIVE
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.


METHODS
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.
Amlani
Amyn M
AM
Department of Speech-Language and Hearing Sciences, Texas Tech University Health Sciences Center, Lubbock 79430, USA. amyn.amlani@ttuhsc.edu
De Silva
Dakshina G
DG
D003132:Commerce / Q000191:economics / Q000592:standards; D012048:Correction of Hearing Impairment / Q000191:economics / Q000592:standards*; D006310:Hearing Aids / Q000191:economics / Q000592:standards / Q000600:supply & distribution; D006311:Hearing Disorders / Q000628:therapy; D006801:Humans; D016018:Least-Squares Analysis; D018803:Models, Economic; D014481:United States; D014486:United States Food and Drug Administration