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Optimal vaccines subsidies for endemic and epidemic diseases
Optimal vaccines subsidies for endemic and epidemic diseases
- Collection:
- Health Policy and Services Research
- Series Title(s):
- Working paper (Stanford Institute for Economic Policy Research)
- Author(s):
- Goodkin-Gold, Matthew, author
Kremer, Michael, author
Snyder, Christopher M., author
Williams, Heidi L., author - Contributor(s):
- Stanford Institute for Economic Policy Research, issuing body.
- Publication:
- Stanford, CA : Stanford Institute for Economic Policy Research (SIEPR), November 2020
- Language(s):
- English
- Format:
- Text
- Subject(s):
- Epidemics -- economics
Mass Vaccination -- economics
Models, Theoretical
Social Factors
United States - Genre(s):
- Technical Report
- Abstract:
- Vaccines exert a positive externality, reducing spread of disease from the consumer to others, providing a rationale for subsidies. We study how optimal subsidies vary with disease characteristics by integrating a standard epidemiological model into a vaccine market with rational economic agents. In the steady-state equilibrium for an endemic disease, across market structures ranging from competition to monopoly, the marginal externality and optimal subsidy are non-monotonic in disease infectiousness, peaking for diseases that spread quickly but not so quickly as to drive all consumers to become vaccinated. Motivated by the Covid-19 pandemic, we adapt the analysis to study a vaccine campaign introduced at a point in time against an emerging epidemic. While the nonmonotonic pattern of the optimal subsidy persists, new findings emerge. Universal vaccination with a perfectly effective vaccine becomes a viable firm strategy: the marginal consumer is still willing to pay since those infected before vaccine rollout remain a source of transmission. We derive a simple condition under which vaccination exhibits increasing social returns, providing an argument for concentrating a capacity-constrained campaign in few regions. We discuss a variety of extensions and calibrations of the results to vaccines and other mitigation measures targeting existing diseases.
- Copyright:
- Reproduced with permission of the copyright holder. Further use of the material is subject to CC BY-NC-ND license. (More information)
- Extent:
- 1 online resource (1 PDF file (90 pages))
- Illustrations:
- Illustrations
- NLM Unique ID:
- 101776193 (See catalog record)
- Permanent Link:
- http://resource.nlm.nih.gov/101776193