Yesterday, the Times reported the results of an intriguing new study, just published in the Journal of the American Medical Association (subscription required). The focus of the story: the placebo effect.
The existence of a placebo effect is well known, and the best work on this topic comes from Anup Malani, another economist (and a good friend) who currently teaches at the University of Chicago Law School. It is now well established that giving a patient a sugar pill (while telling them that it may be medication) can actually have therapeutic effects.
But this new study – by Dan Ariely and coauthors – shows that the placebo effect is itself subject to experimental manipulation. Their experiment is incredibly clever, and very convincing.
The subjects were given an initial series of electric shocks and asked to rate the pain they felt after each shock. The subjects were then allowed to take a placebo pill that they were told was similar to codeine. In fact, the pill had no direct medical benefit at all. While half of the patients were told that their (false) treatment cost $2.50 per pill, the other half were told that their pill had been discounted to $0.10 per pill. They were then given a second series of electric shocks, and once again, asked about how much it hurt.
While 85 percent of the patients taking the $2.50 pill reported that the second set of shocks were less painful, only 61 percent of those taking the (identical!) $0.10 pill reported the shocks to be less painful. So the more expensive the pill, it seems, the larger its perceived effect – even when the pill actually has no medical effect!
And yes, this study was co-authored by the same Dan Ariely who wrote the recently-published popular behavioral economics book, Predictably Irrational.