Pay less, consume more? The price elasticity of home care of the disabled elderly in France

International audienceLittle is known about the price sensitivity of demand for home care of the disabled elderly. We partially ll this knowledge gap by using administrativedata on the beneficiaries of the main French home care subsidy program in a department and exploiting inter|individual variation in provider prices. We address the potential endogeneity of prices by taking advantage of the unequal spatial coverage of providers and instrumenting price by the number of municipalities served by a provider. We estimate a price elasticity of around -0.4 that is significantly different from both 0 and -1. This less than proportionate response of consumption to price has implications for the efficiency and redistributive impact of variation in the level of co-payments in home care subsidy schemes