DP17938 Biased beliefs and stigma as barriers to treatment and innovation adoption
Lung cancer is associated with smoking and is characterized by low treatment rates and research funds. We estimate a model of treatment choice where patients internalize societally biased beliefs on the effectiveness of treatment and stigma, basing their treatment decision on the treatment decisions of their reference group. Identification rests on the exogenous variation in the treatment propensity of physicians. Placing all patients in a neighborhood characterized by low social discrimination increases treatment rates by 4% and the use of innovative therapies by 3%. Social effects account for around 2% of the gap in research funding for lung cancer.