Tuesday, May 27, 2008

Dental Highway to Improved Income

My concern with economic competition in services such as dental care in the United States has been recorded on this blog. Now comes this interesting paper that has featured on a post on the Freakonomics blog that makes the claim that there's an appreciable economic value to having good teeth as it affects income for women especially. Following the brilliant argument that Dubner puts forth and the conclusion that this effect suggests that there's a consistent beauty premium, leads me to wonder how to consider the fact that the dental profession in the US and most probably other parts of the world maintain high barriers to entry.

Taking it as a given that good dental care improves the future income of an individual places dentists in a situation where they are not only able to charge premium prices for the specific dental services that would improve the economic value of teeth but are vicariously responsible for income distribution when they ration dental care. This postulation could be tested by finding out whether areas that have a higher concentration of dental surgeons have higher incomes because of that care or because of the fact that those inhabitants are bound to be significantly wealthier to begin with.

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