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Abstract

The purpose of this study is to analyze the implications of controlling the supply and demand growth rates in the veterinary medicine industry. Particular focus will be the effects on income within and between large and small animal practices. Essentially, the AVMA, in cooperation of the veterinary schools, has a form of market power to control the supply growth of veterinarians entering the market each year. This power will be explored using an equilibrium displacement model (EDM). By using the AVMA’s various data sets, demand and supply curves, along with associated elasticities, can be estimated. These results will be used to simulate various policies in regards to supply. This will be done for the industry on an aggregate level, as well as for certain sectors to test cross sector effects. We anticipate the results to show the effects of various policy tools that the AVMA can implement within the veterinary medicine industry. Since the demand for veterinary services is considered to be slower in growth than the supply, there is need to better understand the options that the veterinary industry can employ in order to prevent a decline in veterinarian incomes.

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