Ask your doctor? direct-to-consumer advertising of pharmaceuticals

Michael Sinkinson, Amanda Starc

Research output: Contribution to journalArticlepeer-review

9 Scopus citations

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 languageEnglish (US)
Pages (from-to)836-881
Number of pages46
JournalReview of Economic Studies
Volume86
Issue number2
DOIs
StatePublished - Jan 1 2019

Keywords

  • Advertising and competition
  • Analysis of health care markets

ASJC Scopus subject areas

  • Economics and Econometrics

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