We develop a theory of rational self-medication. The idea is that forward-looking individuals, lacking access to better treatment options, attempt to manage the symptoms of mental and physical pain outside of formal medical care. They use substances that relieve symptoms in the short run but that may be harmful in the long run. For example, heavy drinking could alleviate current symptoms of depression but could also exacerbate future depression or lead to alcoholism. Rational self-medication suggests that, when presented with a safer, more effective treatment, individuals will substitute towards it. To investigate, we use forty years of longitudinal data from the Framingham Heart Study and leverage the exogenous introduction of selective serotonin reuptake inhibitors (SSRIs). We demonstrate an economically meaningful reduction in heavy alcohol consumption for men when SSRIs became available. Additionally, we show that addiction to alcohol inhibits substitution. Our results suggest a role for rational self-medication in understanding the origin of substance abuse. Furthermore, our work suggests that punitive policies targeting substance abuse may backfire, leading to substitution towards even more harmful substances to self-medicate. In contrast, policies promoting medical innovation that provide safer treatment options could obviate the need to self-medicate with dangerous or addictive substances.
That is a new NBER working paper by Michael E. Darden and Nicholas W. Papageorgge.