Depression for Economists
Major depressive disorder (MDD) is one of the most prevalent mental illnesses worldwide. Existing evidence suggests that it has both economic causes and consequences, such as unemployment. However, depression has not received significant attention in the economics literature. In this paper, we present a simple model which predicts the core symptoms of depression from economic primitives, i.e. beliefs. Specifically, we show that when exogenous shocks cause an agent to have pessimistic beliefs about the returns to her effort, this agent will exhibit depressive symptoms such undereating or overeating, insomnia or hypersomnia, and a decrease in labor supply. When these effects are strong enough, they can generate a poverty trap. We present descriptive evidence that illustrates the predicted relationships.
We thank Jim Reisinger, John Kramer and Benedetta Lerva for excellent research assistance, and Rachid Laajaj, Yves Le Yaouanq, Gautam Rao, Frank Schilbach, Heather Schofield, Bruce Wydick and seminar participants at the NBER Economics of Asset Accumulation and Poverty Traps conference for helpful comments. de Quidt acknowledges support from Handelsbanken’s Research Foundation, grant no: B2014-0460:1. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.
Depression through the Lens of Economics: A Research Agenda, Jonathan de Quidt, Johannes Haushofer. in The Economics of Poverty Traps, Barrett, Carter, and Chavas. 2019