This paper is the first to estimate the impact of exposure to deceptive advertising on consumption of the advertised product and its substitutes. We study the market for over-the-counter (OTC) weight-loss products, a market in which deceptive advertising is rampant and products are generally...

We argue that in pharmaceutical markets, variation in the arrival time of consumer heterogeneity creates differences between a producer's ability to extract consumer surplus with preventives and treatments, potentially distorting R&D decisions. If consumers vary only in disease risk, revenue...

Physicians prescribing drugs for patients with schizophrenia and related conditions are remarkably concentrated in their choice among antipsychotic drugs. In 2007 the single antipsychotic drug prescribed by a physician accounted for 66% of all antipsychotic prescriptions written by that...

We study the Medicare Part D prescription drug insurance program as a bellwether for designs of private, non-mandatory health insurance markets, focusing on the ability of consumers to evaluate and optimize their choices of plans. Our analysis of administrative data on medical claims in Medicare...

Does drug treatment for depression with selective serotonin reuptake inhibitors (SSRIs) increase or decrease the risk of completed suicide? The question is important in part because of recent government warnings that question the safety of SSRIs, one of the most widely prescribed medications in...

Overuse of medical care is often attributed to an informed expert problem, whereby doctors induce patients to purchase unnecessary treatments. Alternatively, patients may drive overuse of medications by exerting pressure on doctors to overprescribe, undermining the doctor's gatekeeping function...

We analyze data from the Health and Retirement Study on senior citizens' take-up of Medicare Part D. Take-up among those without drug coverage in 2004 was high; about fifty to sixty percent of this group have Part D coverage in 2006. Only seven percent of senior citizens lack drug coverage in...

Consumerism arises when patients acquire and use medical information from sources apart from their physicians, such as the Internet and direct-to-patient advertising. Consumerism has been hailed as a means of improving quality. This need not be the result. Consumerist patients place additional...

The classic theory of moral hazard concerns the insurance of a single good and predicts that co-insurance is larger when the elasticity of demand is higher and when small risks are insured. We extend this analysis to the insurance of multiple goods; for example, the simultaneous insurance of...