Direct-to-Consumer Advertising and Online Search

Matthew Chesnes and Ginger Zhe Jin

No 22582, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Beginning in 1997, the Food and Drug Administration (FDA) allowed television advertisements to make major statements about a prescription drug, while referring to detailed drug information on the internet (FDA 1997; 2015). The hope was that consumers would seek additional information online to fully understand the risks and benefits of taking the medication. To better understand the effects of the policy, we analyze direct-to-consumer advertising (DTCA) and search engine click-through data on a set of drugs over a three-year period. Regression analysis shows that advertising on a prescription drug serves to increase the frequency of online search and subsequent clicks for that drug, as well as search for other drugs in the same class. We find the relationship between DTCA and search is stronger for younger drugs, for those drugs that treat acute conditions, those drugs that are less likely to be covered by insurance, and those whose searcher population tends to be older. These findings suggest that DTCA motivates consumers to search online for drug information, but the magnitude of the effect is heterogeneous and potentially associated with clicks on websites that are more promotional in nature.

JEL-codes: D83 I12 K32 L81 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-com, nep-hea, nep-ict, nep-ind, nep-law and nep-mkt
Date: 2016-08
Note: IO
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Published as Matthew Chesnes & Ginger Zhe Jin, 2018. "Direct-to-consumer advertising and online search," Information Economics and Policy, .

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