Misperceived effectiveness and the demand for psychotherapy

While psychotherapy has been shown to be effective in treating depression, take-up remains low. In a sample of 1843 depressed individuals, we document that effectiveness concerns are top of mind when respondents consider the value of therapy. We then show that the average respondent underestimates the effectiveness of therapy. An information treatment correcting this misperception increases participants’ incentivized willingness to pay for a $320 therapy from $166 to $176. Our evidence suggests that while information can influence therapy demand by altering beliefs and shifting attention, it may not significantly increase demand unless substantial subsidies are provided. • Psychotherapy is effective for depression, yet its take-up remains persistently low. • Effectiveness concerns are key when depressed individuals assess therapy’s value. • Respondents underestimate therapy effectiveness, influencing willingness to pay. • Information raising perceived effectiveness increases willingness to pay by $10. • Demand rises through belief change, but subsidies may be needed to drive uptake.