Promoting Wellness or Waste? Evidence from Antidepressant Advertising
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Abstract
It is taken as given by many policy makers that Direct-to-Consumer Advertising of prescription drugs drives inappropriate patients to treatment. Alternatively, advertising may provide useful information that causes appropriate patients to seek treatment. I study this dynamic in the context of antidepressants. Leveraging variation driven by the borders of television markets, I find that a 10 percent increase in anti-depressant advertising leads to a 0.3 percent ($32 million) increase in new prescriptions followed by reductions in workplace absenteeism worth about $770 million. I find no effect of advertising on prices, generic penetration, drug switches, adverse effects, non-adherence rates, or therapist visits.Citation
Shapiro, Bradley T. 2022. "Promoting Wellness or Waste? Evidence from Antidepressant Advertising." American Economic Journal: Microeconomics, 14 (2): 439-77. DOI: 10.1257/mic.20190277Additional Materials
JEL Classification
- D83 Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
- I12 Health Behavior
- J22 Time Allocation and Labor Supply
- L65 Chemicals; Plastics; Rubber; Drugs; Biotechnology
- M31 Marketing
- M37 Advertising
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