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) |
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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 |
Keywords
- Advertising and competition
- Analysis of health care markets
ASJC Scopus subject areas
- Economics and Econometrics