Effects of Economy and FDA Intervention on the Hearing Aid Industry Purpose: 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. Method: A 3-stage least squares regression technique was used to analyze the hearing aid market. Results: Our results show that, while recessionary periods ... Research Article
Research Article  |   June 01, 2005
Effects of Economy and FDA Intervention on the Hearing Aid Industry
 
Author Affiliations & Notes
  • Amyn M. Amlani
    Department of Speech-Language and Hearing Sciences, Texas Tech University Health Sciences Center, 3601 4th Street, Stop 6073, Lubbock, TX 79430
  • Dakshina G. De Silva
    Texas Tech University, Lubbock
  • Corresponding author: e-mail: amyn.amlani@ttuhsc.edu
Article Information
Hearing Aids, Cochlear Implants & Assistive Technology / Regulatory, Legislative & Advocacy / Research and Technology / Research Articles
Research Article   |   June 01, 2005
Effects of Economy and FDA Intervention on the Hearing Aid Industry
American Journal of Audiology, June 2005, Vol. 14, 71-79. doi:10.1044/1059-0889(2005/006)
History: Received January 10, 2004 , Revised April 19, 2004 , Accepted February 14, 2005
 
American Journal of Audiology, June 2005, Vol. 14, 71-79. doi:10.1044/1059-0889(2005/006)
History: Received January 10, 2004; Revised April 19, 2004; Accepted February 14, 2005

Purpose: 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.

Method: 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.

Acknowledgments
The authors thank Sergei Kochkin and an anonymous reviewer for comments provided during the peer review process, and Carole Rogin of the Hearing Industries Association for providing us with quarterly data on the number of units sold. We also express gratitude to Rajinder Koul, Tori Gustafson, Jamie B. Kruse, Nidhi Thakur, and Allwyn Tellis for their helpful comments. Portions of this article were presented at the 84th Annual Meeting of the Southwestern Social Sciences Association held in Corpus Christi, TX, March 17–20, 2004.
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