Recently controversy has surrounded the issue of whether Social Security payments to the elderly should continue to be adjusted automatically according to changes in the Consumer Price Index (CPI). One issue in the public policy debate concerns whether price inflation is different for the...

Using annual IMS data from 1990 to 1996, we examine empirically whether whether elderly-nonelderly price inflation differentials exist for one medical item, namely, prescription pharmaceuticals. We assess prices for Rx for Rx drugs destined for ultimate use by the elderly vs. the nonelderly at...