Generic aversion and observational learning in the over-the-counter drug market

Sofia Villas-Boas and Mariana Carrera

Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series from Department of Agricultural & Resource Economics, UC Berkeley

Abstract: Through a labeling intervention at a national retailer, we test three hypotheses for consumer aversion to generic over the counter (OTC) drugs: lack of information on the comparability of generic and brand drugs, inattention to their price differences, and uncertainty about generic quality that can be reduced with information on peer purchase rates. With a difference-in-differences strategy, we find that posted information on the purchases of other customers increases generic purchase shares significantly, while the other treatments do not. Consumers without prior generic purchases appear particularly responsive to this information. These findings have policy implications for promoting evidence-based, cost-effective choices.

Keywords: Social; and; Behavioral; Sciences (search for similar items in EconPapers)
Date: 2016-10-28
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Citations: View citations in EconPapers (1)

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Related works:
Journal Article: Generic Aversion and Observational Learning in the Over-the-Counter Drug Market (2023)
Working Paper: Generic Aversion and Observational Learning in the Over-the-Counter Drug Market (2020)
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