I hear this question quite a bit when I point out that growth hormone does not improve athletic performance. One plausible explation is that players are not well informed on the subject, given that most of their information comes from drug pushers (see Andy Pettitte’s and Chuck Knoblauch’s depositions) and the ill-informed media. But, Justin Wolfers at Freakonomics points to a new study that offers another possible explanation: the placebo effect.

A placebo is a benign substance used in medical trials to control for psychological responses to drugs. For example, a drug given to arthritis patients may cause them to feel better just because they expect to feel better, not because the drug actually worked. Similarly, players who use human growth hormone may notice themselves feeling stronger and more productive after taking a substance that is supposed to have this effect. A colleague of mine who conducts clinical trials on athletes tells me it is common for his placebo subjects to insist they are getting the real stuff.

It turns out that the placebo effect of human growth hormone could be even stronger than previously expected. New research by economist Dan Ariely finds that the placebo effect is exacerbated by the price of the drug.

A higher price can create the impression of higher value, just as a placebo pill can reduce pain.

Now researchers have combined the two effects. A $2.50 placebo, they have found, works better one that costs 10 cents.

The finding may explain the popularity of some high-cost drugs over cheaper alternatives, the authors conclude. It may also help account for patients’ reports that generic drugs are less effective than brand-name ones, though their active ingredients are identical.

Why is this relevant? Human growth hormone is very expensive relative to other performance-enhancing drugs. According to the Mitchell Report, Kirk Radomski charged his clients $1,600 for a one-month supply of human growth hormone, while he only charged $400 for Winstrol.

Radomski typically paid at least $1,000 or more for one “kit” of human growth hormone, which included seven vials of distilled water and the same number of packages of lypholized human growth hormone powder, but the price depended on availability. He generally resold kits for $1,600 each, but in some instances charged less depending on his relationship with the player (pp. 144–145).

Radomski believed he made between three and five sales to [Chad] Allen involving Winstrol, testosterone, and Deca-Durabolin. According to Radomski, Allen could not afford human growth hormone…. Radomski mailed a one or two-month supply of Winstrol to Allen at his home in Texas. Allen paid Radomski approximately $400 by check (pp. 225–226).

Players who use performance-enhancing drugs have a strong reason to believe that a drug that is four-times as expensive as a common anabolic steroid is also going to improve performance. Thus, in light of Ariely’s study, it is not surprising that some players have convinced themselves that human growth hormone is responsible for improved performance.