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Depression for Economists

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  • Jonathan de Quidt
  • Johannes Haushofer

Abstract

Major depressive disorder (MDD) is one of the most prevalent mental illnesses worldwide. Existing evidence suggests that it has both economic causes and consequences, such as unemployment. However, depression has not received significant attention in the economics literature. In this paper, we present a simple model which predicts the core symptoms of depression from economic primitives, i.e. beliefs. Specifically, we show that when exogenous shocks cause an agent to have pessimistic beliefs about the returns to her effort, this agent will exhibit depressive symptoms such undereating or overeating, insomnia or hypersomnia, and a decrease in labor supply. When these effects are strong enough, they can generate a poverty trap. We present descriptive evidence that illustrates the predicted relationships.

Suggested Citation

  • Jonathan de Quidt & Johannes Haushofer, 2016. "Depression for Economists," NBER Working Papers 22973, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:22973
    Note: DEV HE
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    References listed on IDEAS

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    Cited by:

    1. Bhalotra, Sonia & Delavande, Adeline & Font-Gilabert, Paulino & Maselko, Joanna, 2020. "Maternal investments in children: the role of expected effort and returns," ISER Working Paper Series 2020-03, Institute for Social and Economic Research.
    2. Janina Isabel Steinert & Rucha Vasumati Satish & Felix Stips & Sebastian Vollmer, 2020. "Commitment or Concealment? Impacts and Use of a Portable Saving Device: Evidence from a Field Experiment in Urban India," Munich Papers in Political Economy 04, TUM School of Governance at the Technical University of Munich.
    3. Guadalupe Bedoya & Aidan Coville & Johannes Haushofer & Mohammad Isaqzadeh & Jeremy P. Shapiro, 2019. "No Household Left Behind: Afghanistan Targeting the Ultra Poor Impact Evaluation," NBER Working Papers 25981, National Bureau of Economic Research, Inc.
    4. Strulik, Holger, 2019. "An economic theory of depression and its impact on health behavior and longevity," Journal of Economic Behavior & Organization, Elsevier, vol. 158(C), pages 269-287.
    5. Travis J. Lybbert & Bruce Wydick, 2017. "Hope as Aspirations, Agency, and Pathways: Poverty Dynamics and Microfinance in Oaxaca, Mexico," NBER Chapters, in: The Economics of Poverty Traps, pages 153-177, National Bureau of Economic Research, Inc.
    6. Victoria Baranov & Sonia Bhalotra & Pietro Biroli & Joanna Maselko, 2017. "Maternal Depression, Women’s Empowerment, and Parental Investment: Evidence from a Large Randomized Control Trial," CHILD Working Papers Series 60 JEL Classification: I1, Centre for Household, Income, Labour and Demographic Economics (CHILD) - CCA.
    7. Novak, Lindsey, 2020. "Persistent norms and tipping points: The case of female genital cutting," Journal of Economic Behavior & Organization, Elsevier, vol. 177(C), pages 433-474.
    8. Victoria Baranov & Sonia Bhalotra & Pietro Biroli & Joanna Maselko, 2018. "Maternal Depression, Women’s Empowerment, and Parental Investment: Evidence from a Randomized Control Trial," Working Papers 2018-021, Human Capital and Economic Opportunity Working Group.
    9. Baranov, Victoria & Bhalotra, Sonia R. & Biroli, Pietro & Maselko, Joanna, 2017. "Maternal Depression, Women's Empowerment, and Parental Investment: Evidence from a Large Randomized Control Trial," IZA Discussion Papers 11187, Institute of Labor Economics (IZA).
    10. Matthew W. Ridley & Gautam Rao & Frank Schilbach & Vikram H. Patel, 2020. "Poverty, Depression, and Anxiety: Causal Evidence and Mechanisms," NBER Working Papers 27157, National Bureau of Economic Research, Inc.
    11. Alloush, M., 2018. "Income, Psychological Well-being, and the Dynamics of Poverty: Evidence from South Africa," 2018 Annual Meeting, August 5-7, Washington, D.C. 274223, Agricultural and Applied Economics Association.
    12. Pailler, Sharon & Tsaneva, Magda, 2018. "The effects of climate variability on psychological well-being in India," World Development, Elsevier, vol. 106(C), pages 15-26.

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    More about this item

    JEL classification:

    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • I1 - Health, Education, and Welfare - - Health
    • I15 - Health, Education, and Welfare - - Health - - - Health and Economic Development
    • I3 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty

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