Positively Aware? Conflicting Expert Reviews and Demand for Medical Treatment

68 Pages Posted: 31 Aug 2017

See all articles by Jorge F. Balat

Jorge F. Balat

University of Texas at Austin - Department of Economics

Nicholas W. Papageorge

Johns Hopkins University Department of Economics

Shaiza Qayyum

Johns Hopkins University

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Abstract

We study the impact of expert reviews on the demand for HIV treatments. A novel feature of our study is that we observe two reviews for each HIV drug and focus attention on consumer responses when experts disagree. Reviews are provided by both a doctor and an activist in the HIV lifestyle magazine Positively Aware, which we merge with detailed panel data on HIV-positive men's treatment consumption and health outcomes. To establish a causal relationship between reviews and demand, we exploit the arrival of new drugs over time, which provides arguably random variation in reviews of existing drugs. We find that when doctors and activists agree, more positive reviews increase demand for HIV drugs. However, doctors and activists frequently disagree, most often over treatments that are effective, but have harsh side effects, in which case they are given low ratings by the activist, but not by the doctor. In such cases, relatively healthy consumers favor drugs with higher activist reviews, thus defying the doctor, which is consistent with a distaste for side effects. This pattern reverses for individuals who are in worse health and thus face stronger incentives to choose more effective medication despite side effects. Findings suggest that consumers demand information from experts according to the trade-offs they face when making health investments in the presence of adverse treatment side effects.

Keywords: health, information, product reviews, pharmaceutical demand, HIV/AIDS

JEL Classification: I12, L15, M3, D12, D83

Suggested Citation

Balat, Jorge F. and Papageorge, Nicholas W. and Qayyum, Shaiza, Positively Aware? Conflicting Expert Reviews and Demand for Medical Treatment. IZA Discussion Paper No. 10919, Available at SSRN: https://ssrn.com/abstract=3029789 or http://dx.doi.org/10.2139/ssrn.3029789

Jorge F. Balat (Contact Author)

University of Texas at Austin - Department of Economics ( email )

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Nicholas W. Papageorge

Johns Hopkins University Department of Economics ( email )

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Baltimore, MD 21218-2685
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Shaiza Qayyum

Johns Hopkins University

Baltimore, MD 20036-1984
United States

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