Bradley Shapiro studies empirical industrial organization and applied microeconomics. His research has largely focused on the pharmaceutical industry, with the goal of informing both firm strategy and public policy. His interests also extend to advertising, marketing in the health care sector, and organizational economics. Shapiro is especially interested in causal identification using natural experiments in quantitative marketing contexts, particularly in measuring the effects of advertising and marketing levers. His research has appeared in the Journal of Political Economy and Quantitative Marketing & Economics.
Shapiro earned a Ph.D. in economics from Massachusetts Institute of Technology (MIT). Prior degrees include an M.S. in mathematics, a B.S. in mathematics, and a B.A. in economics all from Virginia Tech. Shapiro is also a certified private pilot and consults for a wine importing firm in his spare time.
At Booth, Shapiro teaches Marketing Strategy.
2016 - 2017 Course Schedule
REVISION: Advertising in Health Insurance Markets
The effects of television advertising in market for health insurance are of distinct interest to both firms and regulators, due to both the sheer size of the market and some of its more particular characteristics when it comes to consumer choice. Regulators are concerned about firms potentially using ads to "cream skim," or attract an advantageous risk pool, as well as the potential for firms to use misinformation to take advantage of the elderly. On the other hand, ads could provide useful information or remind people to reconsider their options, making regulation potentially welfare-reducing. Using the discontinuity in advertising exposure created by the borders of television markets, this study estimates television advertising to have on average zero lift on both the share of seniors who choose private Medicare Advantage (MA) plans over government-provided Traditional Medicare (TM), as well as brand share conditional on MA purchase with enough precision to exclude positive ROI ...
REVISION: Estimating the Cost of Strategic Entry Delay in Pharmaceuticals: The Case of Ambien CR
With the Hatch-Waxman Act of 1984, the FDA included an unchallengeable exclusivity period for newly approved drugs, independent of patents. This potentially generates an incentive for firms to strategically delay the introduction of new versions (reformulations) of drugs until just before patent expiration of the original drug. This way the reformulated drug competes mainly with newly introduced generics of the original drug. If instead, the reformulated drug was to be introduced well before the original drug’s patent expires, the reformulated drug would compete only with the original drug. While the pattern of strategic delay is well documented in the literature, its effects on consumers and firms are not. Reformulations may increase utility through improved efficacy and through fewer doses per day or a more even molecule decay rate. However, as suggested in the press and literature, it is also possible that the adoption of reformulated products is mostly the result of advertising ...
REVISION: Informational Shocks, Off-Label Prescribing and the Effects of Physician Detailing
The relationship between pharmaceutical detailing and prescriptions for non FDA-approved (off-label) use has been the subject of regulatory scrutiny, with more than $12 billion in regulatory settlements for off-label promotion since 2004. Using the case of AstraZeneca's anti-psychotic drug, Seroquel, I study the extent to which off-label prescriptions are caused by detailing. Using a physician panel that connects detailing exposure to medical charts, I exploit within-physician variation to identify detailing effects. I find the effect of detailing on off-label prescriptions is small in both absolute and relative terms. Detailing on net tilts the prescribing distribution toward on-label.
REVISION: Positive Spillovers and Free Riding in Advertising of Prescription Pharmaceuticals: The Case of Antidepressants
Television advertising of prescription drugs is controversial, and it remains illegal in all but two countries. Much of the opposition stems from concerns that advertising directly to consumers may inefficiently distort prescribing patterns toward the advertised product. Despite the controversy surrounding the practice, its effects are not well understood. Exploiting a discontinuity in advertising along the borders of television markets, I estimate that television advertising of prescription antidepressants exhibits significant positive spillovers on rivals' demand. I then construct and estimate a multi-stage demand model that allows advertising to be pure category expansion, pure business stealing, or some of each. Estimated parameters indicate advertising has strong market-level demand effects that tend to dominate business-stealing effects. Spillovers are both large and persistent. Using the demand estimates and a stylized supply model, I explore the consequences of the positive ...