from Health Economics at http://bit.ly/2M4fAaH on July 30, 2018 at 10:43PM
We study the impact of expert reviews on the demand for HIV treatments. A novel feature of our study is that we observe two reviews for each HIV drug and focus attention on consumer responses when experts disagree. Reviews are provided by both a doctor and an activist in the HIV lifestyle magazine Positively Aware, which we merge with detailed panel data on HIV-positive men’s treatment consumption and health outcomes. To establish a causal relationship between reviews and demand, we exploit the arrival of new drugs over time, which provides arguably random variation in reviews of existing drugs. We find that when doctors and activists agree, positive reviews increase demand for HIV drugs. However, doctors and activists frequently disagree, most often over treatments that are effective, but have harsh side effects, in which case they are given low ratings by the activist, but not by the doctor. In such cases, relatively healthy consumers favor drugs with higher activist reviews, which is consistent with a distaste for side effects. This pattern reverses for individuals who are in worse health and thus face stronger incentives to choose more effective medication despite side effects. Findings suggest that consumers demand information from experts whose review is more aligned to their preferences over health versus side effects, which can vary by health status.