Promoting Wellness or Waste? Evidence from Antidepressant Advertising
49 Pages Posted: 6 Mar 2018 Last revised: 9 Nov 2018
Date Written: November 8, 2018
Direct-to-Consumer Advertising (DTCA) of prescription drugs is controversial. Even if drugs are efficacious, advertising may drive people to be prescribed for whom treatment will be ineffective. Leveraging plausibly exogenous variation in advertising driven by the borders of television markets, this paper provides the first quasi-experimental measurement of the effect of DTCA on ex-post well-being. In particular, antidepressant advertising decreases work absenteeism, a primary outcome associated with depression. The wage benefit of a 10% increase in advertising is about $770 million. This labor supply effect co-occurs at the individual level with an incremental $32 million in new initiations of antidepressant treatment. Keywords: Advertising, Selection, Pharmaceuticals, Labor Supply.
Keywords: Advertising, DTCA, Labor Supply, Health, Selection
JEL Classification: M31, M37, M38, H23, I11, I12, I18, L51, J22, J24, M54
Suggested Citation: Suggested Citation