Promoting Wellness or Waste? Evidence from Antidepressant Advertising

58 Pages Posted: 6 Mar 2018 Last revised: 15 Jan 2020

See all articles by Bradley Shapiro

Bradley Shapiro

University of Chicago - Booth School of Business

Date Written: January 10, 2020

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% increase in antidepressant advertising leads to a 0.3% ($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.

Keywords: Advertising, DTCA, Labor Supply, Health, Selection

JEL Classification: M31, M37, M38, H23, I11, I12, I18, L51, J22, J24, M54

Suggested Citation

Shapiro, Bradley, Promoting Wellness or Waste? Evidence from Antidepressant Advertising (January 10, 2020). Becker Friedman Institute for Research in Economics Working Paper No. 2018-14. Available at SSRN: https://ssrn.com/abstract=3130327 or http://dx.doi.org/10.2139/ssrn.3130327

Bradley Shapiro (Contact Author)

University of Chicago - Booth School of Business ( email )

5807 S. Woodlawn Avenue
Chicago, IL 60637
United States

HOME PAGE: http://faculty.chicagobooth.edu/bradley.shapiro/

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