Direct and indirect savings from parallel imports in Sweden

Health Economics Review

Table 3 Estimation results for lnP_it

	Discounts forbidden	Discounts allowed
	Oct. 2002–Oct. 2007	Jan. 2011–Dec. 2017
lnP_{i, t − 1}	0.9568***	0.9171***
lnP_{i, t − 1}	(0.0055)	(0.0174)
D _ PiSubstance_st	−0.0017***	−0.0012
D _ PiSubstance_st	(0.0006)	(0.0009)
D _ PiE_it	−0.0012*	− 0.0003
D _ PiE_it	(0.0007)	(0.0005)
lnN _ PiSubstance_st	0.0001	−0.0002
lnN _ PiSubstance_st	(0.0004)	(0.0008)
lnN _ PiE_it	−0.0010*	0.0009
lnN _ PiE_it	(0.0006)	(0.0008)
D _ Th_st	−0.0001	0.0005
D _ Th_st	(0.0008)	(0.0019)
D _ ThGen_st	−0.0007	0.0002
D _ ThGen_st	(0.0006)	(0.0012)
lnN _ Th_it	−0.0012	−0.0026**
lnN _ Th_it	(0.0012)	(0.0012)
lnN _ ThGen_st	0.0010	−0.0011
lnN _ ThGen_st	(0.0007)	(0.0015)
\(d{lnP}_i^{\ast }/ dD\_{PiSubstance}_{st}^{\ast }\)	−0.0601***	−0.0128
\(d{lnP}_i^{\ast }/ dD\_{PiSubstance}_{st}^{\ast }\)	(0.0151)	(0.0116)
Observations	119,945	90,228
R²	0.9183	0.8797
K-P rk LM	72.9704	65.2018
K-P rk LM, p-value	0.0000	0.0000
Hansen J, p-value	0.1293	0.1792

Note: See Table 1 for variable definitions. The specifications include product-specific fixed effects and 58 and 81 indicator variables for months, respectively. In the first-stage regressions, data from Oct. 2002–Oct. 2007 and Jan. 2011–Dec. 2017 were used. K-P rk LM refers to the Kleibergen-Paap rk LM statistic, which indicates the strength of the instruments. The null hypothesis in the K-P test is that the model is under-identified. The null hypothesis for the Hansen J test is that the instruments are valid, i.e., uncorrelated with the error term. Standard errors, robust to correlations within substances, are given in parentheses. ***, **, and * indicate that the coefficient is significantly different from zero on the 1, 5 and 10% significance levels, respectively. The estimation results for the indicator variables for months and for the first-stage regressions are available on request. In short, the first-stage regressions show that their own lag is the strongest instrument for each of the eight competition variables, with t-values ranging from 12 to 143 and point estimates from 0.67 to 0.93, and the R² for the first stage regressions range from 0.49 to 0.89

ISSN: 2191-1991