DP17309 The Long-Run Effects of Psychotherapy on Depression, Beliefs, and Economic Outcomes

Author(s): Bhargav Bhat, Jonathan de Quidt, Johannes Haushofer, Vikram Patel, Gautam Rao, Frank Schilbach, Pierre-Luc Vautrey
Publication Date: May 2022
Keyword(s): beliefs, mental health, preferences, therapy
JEL(s): D03, D91, I15, O12
Programme Areas: Development Economics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=17309

We revisit two clinical trials that randomized depressed adults in India (n=775) to a brief course of psychotherapy or a control condition. Four to five years later, the treatment group was 11 percentage points less likely to be depressed than the control group. The more effective intervention averted 9 months of depression on average over five years and cost only $66 per recipient. Therapy changed people's beliefs about themselves in three ways. First, it reduced their likelihood of seeing themselves as a failure or feeling bad about themselves. Second, when faced with a novel work opportunity, therapy reduced over-optimistic belief updating in response to feedback and thus reduced overconfidence. Third, it increased self-assessed levels of patience and altruism. Therapy did not increase levels of employment or consumption, possibly because of other constraints on employment in the largely female study sample.