National survey reveals elastic price sensitivity for select equine veterinary services.

This national survey aimed to understand how changes in the pricing of three common horse-related veterinary services could impact the demand for those services. The study also investigated how these price changes might affect the financial sustainability of veterinary practices.

Introduction and Methods

• In an effort to comprehend the link between price and demand for equine veterinary services, this study focused on three common procedures: vaccinations, lameness tests, and emergency colic surgery. These services span from routine to emergency.
• The researchers collected data through a national online survey, which was accessible to US residents who are financially responsible for at least one equine animal.
• The survey was spread through the participating organizations’ social media platforms and email listing, with its duration spanning from August 15 to September 11, 2023.
• The survey received a total of 4,915 usable responses from participants of every state in the United States.

Results

• The study found that there is an elastic demand for all the three services. In economic terms, elasticity refers to how changes in price can significantly affect the demand for a product or service. In this case, the demand for the veterinary services decreases as their prices increase.
• This information suggests that equine veterinary practices could face a decrease in demand if they raise their prices.

Conclusions and Implications

• The study concludes that understanding this elasticity is crucial for the long-term financial sustainability of equine veterinary practices. Misjudging this could potentially lead to a decrease in demand and a decline in revenue.
• The findings also suggest that the business models for small animal and equine practices should differ due to the significant variances in their pricing structures.
• Interesting to note, even though it sounds counterproductive, the study claims that strategic price increases could contribute to profitability due to the elastic nature of the demand. While it may decrease the volume of services sold, it could potentially lead to lower costs which might compensate for any reduction in revenue.
• Last but not least, the findings of this study on elastic demand can also help in making decisions around discounts, bundling of services and developing tiered service offerings.