Abstract
We measure the impact of direct-to-consumer television advertising (DTCA) by drug manufacturers. Our identification strategy exploits shocks to local advertisingmarkets generated by the political advertising cycle and a regulatory intervention affecting a single product. We find evidence of significant business stealing effects among branded, advertised drugs. In addition, we show positive spillovers from drug advertisements to non-advertised competitors in the same class. We decompose the effect and show it is primarily due to new customers. Finally, we provide evidence that DTCA is cost-effective from a societal standpoint in our setting.
| Original language | English (US) |
|---|---|
| Pages (from-to) | 836-881 |
| Number of pages | 46 |
| Journal | Review of Economic Studies |
| Volume | 86 |
| Issue number | 2 |
| DOIs | |
| State | Published - Jan 1 2019 |
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Keywords
- Advertising and competition
- Analysis of health care markets
ASJC Scopus subject areas
- Economics and Econometrics
Cite this
}
Ask your doctor? direct-to-consumer advertising of pharmaceuticals. / Sinkinson, Michael; Starc, Amanda.
In: Review of Economic Studies, Vol. 86, No. 2, 01.01.2019, p. 836-881.Research output: Contribution to journal › Article
TY - JOUR
T1 - Ask your doctor? direct-to-consumer advertising of pharmaceuticals
AU - Sinkinson, Michael
AU - Starc, Amanda
PY - 2019/1/1
Y1 - 2019/1/1
N2 - We measure the impact of direct-to-consumer television advertising (DTCA) by drug manufacturers. Our identification strategy exploits shocks to local advertisingmarkets generated by the political advertising cycle and a regulatory intervention affecting a single product. We find evidence of significant business stealing effects among branded, advertised drugs. In addition, we show positive spillovers from drug advertisements to non-advertised competitors in the same class. We decompose the effect and show it is primarily due to new customers. Finally, we provide evidence that DTCA is cost-effective from a societal standpoint in our setting.
AB - We measure the impact of direct-to-consumer television advertising (DTCA) by drug manufacturers. Our identification strategy exploits shocks to local advertisingmarkets generated by the political advertising cycle and a regulatory intervention affecting a single product. We find evidence of significant business stealing effects among branded, advertised drugs. In addition, we show positive spillovers from drug advertisements to non-advertised competitors in the same class. We decompose the effect and show it is primarily due to new customers. Finally, we provide evidence that DTCA is cost-effective from a societal standpoint in our setting.
KW - Advertising and competition
KW - Analysis of health care markets
UR - http://www.scopus.com/inward/record.url?scp=85067026981&partnerID=8YFLogxK
UR - http://www.scopus.com/inward/citedby.url?scp=85067026981&partnerID=8YFLogxK
U2 - 10.1093/restud/rdy001
DO - 10.1093/restud/rdy001
M3 - Article
AN - SCOPUS:85067026981
VL - 86
SP - 836
EP - 881
JO - Review of Economic Studies
JF - Review of Economic Studies
SN - 0034-6527
IS - 2
ER -