Peer-reviewed veterinary case report
National survey reveals elastic price sensitivity for select equine veterinary services.
- Journal:
- Journal of the American Veterinary Medical Association
- Year:
- 2025
- Authors:
- Gibson, Olivia L et al.
- Affiliation:
- Martin-Gatton College of Agriculture
- Species:
- horse
Plain-English summary
This study looked at how horse owners in the U.S. respond to changes in prices for three common veterinary services: vaccinations, lameness examinations, and emergency colic surgery. Researchers gathered information from nearly 5,000 horse owners through an online survey to see how much they were willing to pay for these services. They found that when prices go up, the number of people willing to use these services tends to drop more than the price increase itself, indicating that horse owners are sensitive to price changes. This information is important for veterinarians to understand how to set prices and offer services in a way that keeps their practices financially healthy. Overall, the study suggests that while raising prices might seem risky, it could actually help veterinary practices become more profitable in the long run.
Abstract
OBJECTIVE: The objective of this study was to estimate the price elasticity of demand for 3 common equine veterinary services: vaccinations (a routine service), lameness examinations (an elective service), and emergency colic surgery (an urgent service). METHODS: Data were collected via a nationwide online survey of horse owners from August 15 to September 11, 2023, eliciting their willingness to pay for each service. The link to the online survey was distributed through participating organizations' social media and email lists to the target audience of US residents aged ≥ 18 years who were financially responsible for at least 1 horse, pony, mule, or donkey. Statistical software was used to estimate the demand models. RESULTS: The survey received a total of 4,915 usable responses, with at least one response from every state in the US. Results revealed elastic demand for all 3 services and subsample analyses provided reassurance as to the robustness of the results, suggesting that quantity demanded of these services would decrease more in a relative sense as compared to the increase in price. CONCLUSIONS: Understanding the current and future trends of equine veterinary service demand is vital in ensuring the long-term financial sustainability of equine veterinary practices. Moreover, due to vast differences in the pricing structure of small animal and equine practice procedures, business models for these types of practices should be treated separately. CLINICAL RELEVANCE: Although it may seem counterintuitive for practice growth, the estimated price elasticity of demand suggests that strategic price increases could enhance profitability. While higher prices may reduce service volume, they could also lead to lower costs, potentially offsetting any revenue reduction. Moreover, the findings on elastic demand can also inform decisions regarding discounts, service bundles, and the development of tiered service offerings.
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Search related cases →Original publication: https://pubmed.ncbi.nlm.nih.gov/39536458/