Can Viagra Advertising Make More Babies? Direct-to-Consumer Advertising on Public Health Outcomes

Abstract

Although product advertising has been widely studied and understood in relation to the consumer’s purchase decision, advertising may also have unintended but important societal and economic consequences. In this paper, we examine a public health outcome — birth rate — associated with advertisements for erectile dysfunction (ED) drugs. Since the United States loosened regulations on direct-to-consumer television advertising for prescription drugs in 1997, ED drug makers have consistently been top spenders. By comparing advertising data with multiple birth data sets (patient-level hospital data from Massachusetts between 2001 and 2010 and micro birth certificate data from the U.S. between 2000 and 2004), we demonstrate that increased ED drug television advertising leads to a higher birth rate. Our results, which are robust with respect to different functional forms and falsification tests, show that a 1% increase in ED drug advertising contributes to an increase of 0.04-0.08% of total births. Our findings suggest that beyond the customer purchase decision, advertising can have important public health outcomes, with resulting implications for managerial decision-making and policy formulation.

Keywords: Healthcare marketing, Advertising, Public policy, Fertility, Birth rate, Border identification

JEL Classification: C01, C23, I10, I14, I18, M31, M37