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The Power of the Little Blue Pill: Innovations and Implications of Life Style Drugs in an Aging Population

Author

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  • LaRiviere, Jacob

    (University of Tennessee)

  • Wolff, Hendrik

    (Simon Fraser University)

Abstract

The launch of Viagra in April 1998 led to a historically unprecedented high usage of erectile dysfunction (ED) drugs. We test whether Viagra's introduction significantly influenced outcomes for its target population such as STD rates of older men, as well as its non-target populations, such as divorces, natality, the distribution of the age spread within couples, female STDs and sexual assault rates. We find causal evidence that Viagra's introduction increased Gonorrhea rates in older men by 15-28%. We find no significant evidence of any effects on other variables. We take this as evidence that this lifestyle drug causes significant changes in choices only which affect short term outcomes, while long term planned decisions are unaffected. Overall, we find that the welfare impacts of Viagra with respect to our outcomes of interest are positive and large.

Suggested Citation

  • LaRiviere, Jacob & Wolff, Hendrik, 2014. "The Power of the Little Blue Pill: Innovations and Implications of Life Style Drugs in an Aging Population," IZA Discussion Papers 8261, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp8261
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    References listed on IDEAS

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    1. Claudia Goldin & Lawrence F. Katz, 2002. "The Power of the Pill: Oral Contraceptives and Women's Career and Marriage Decisions," Journal of Political Economy, University of Chicago Press, vol. 110(4), pages 730-770, August.
    2. Daniel Kahneman & Jack L. Knetsch & Richard H. Thaler, 1991. "Anomalies: The Endowment Effect, Loss Aversion, and Status Quo Bias," Journal of Economic Perspectives, American Economic Association, vol. 5(1), pages 193-206, Winter.
    3. Gilat Levy, 2005. "The Politics of Public Provision of Education," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 120(4), pages 1507-1534.
    4. Richard Blundell & Monica Costa Dias & Costas Meghir & John Van Reenen, 2004. "Evaluating the Employment Impact of a Mandatory Job Search Program," Journal of the European Economic Association, MIT Press, vol. 2(4), pages 569-606, June.
    5. Martha J. Bailey, 2006. "More Power to the Pill: The Impact of Contraceptive Freedom on Women's Life Cycle Labor Supply," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 121(1), pages 289-320.
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    Cited by:

    1. Sims, Charles & Finnoff, David & O’Regan, Suzanne M., 2016. "Public control of rational and unpredictable epidemics," Journal of Economic Behavior & Organization, Elsevier, vol. 132(PB), pages 161-176.

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    More about this item

    Keywords

    differences-in-differences; Viagra; aging population; STD; prescription drugs;
    All these keywords.

    JEL classification:

    • I1 - Health, Education, and Welfare - - Health
    • J1 - Labor and Demographic Economics - - Demographic Economics
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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