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Choosing between adaptation and prevention with an increasing probability of a pandemic

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  • Berry, Kevin
  • Finnoff, David

Abstract

The risk of pandemics is increasing, driven by changes in human behavior and climate, both of which are difficult for policymakers to control. There are two main strategies available for reacting to these changes. This paper considers the decision to invest in either adaptation (domestic) capital or prevention (foreign) capital before a pandemic in an interval of time when pandemic risk is increasing. This paper demonstrates how relatively small investments in the two strategies can provide large savings through smaller expected future damages. The technical relationships between adaptation, prevention and risk also determine the optimal mixture of investment over time. As risk increases, the technical relationships between these three stocks causes the optimal mixture of strategies to change over time.

Suggested Citation

  • Berry, Kevin & Finnoff, David, 2016. "Choosing between adaptation and prevention with an increasing probability of a pandemic," Journal of Economic Behavior & Organization, Elsevier, vol. 132(PB), pages 177-192.
    • Handle: RePEc:eee:jeborg:v:132:y:2016:i:pb:p:177-192
    DOI: 10.1016/j.jebo.2016.06.007
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    References listed on IDEAS

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    Cited by:

    1. Munir Ahmad & Nadeem Akhtar & Gul Jabeen & Muhammad Irfan & Muhammad Khalid Anser & Haitao Wu & Cem Işık, 2021. "Intention-Based Critical Factors Affecting Willingness to Adopt Novel Coronavirus Prevention in Pakistan: Implications for Future Pandemics," IJERPH, MDPI, vol. 18(11), pages 1-28, June.

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    More about this item

    Keywords

    Endogenous risk; Prevention schedule; Optimal control; Infectious disease;
    All these keywords.

    JEL classification:

    • Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy
    • Q29 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Other
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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