Rational self-medication

We develop a model of rational self-medication in which individuals use potentially dangerous or addictive substances (e.g., alcohol) to manage symptoms of illness (e.g., depression) outside of formal medical care. A model implication is that the emergence of better treatments reduces incentives to self-medicate. 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 alcohol consumption when SSRIs became available. Our findings illustrate how the effects of medical innovation operate, in part, through changes in behavior.