Using private demand studies to calculate socially optimal vaccine subsidies in developing countries
AbstractAlthough it is well known that vaccines against many infectious diseases confer positive economic externalities via indirect protection, analysts have typically ignored possible herd protection effects in policy analyses of vaccination programs. Despite a growing literature on the economic theory of vaccine externalities and several innovative mathematical modeling approaches, there have been almost no empirical applications. The first objective of the paper is to develop a transparent, accessible economic framework for assessing the private and social economic benefits of vaccination. We also describe how stated preference studies (for example, contingent valuation and choice modeling) can be useful sources of economic data for this analytic framework. We demonstrate socially optimal policies using a graphical approach, starting with a standard textbook depiction of Pigouvian subsidies applied to herd protection from vaccination programs. We also describe nonstandard depictions that highlight some counterintuitive implications of herd protection that we feel are not commonly understood in the applied policy literature. We illustrate the approach using economic and epidemiological data from two neighborhoods in Kolkata, India. We use recently published epidemiological data on the indirect effects of cholera vaccination in Matlab, Bangladesh (Ali et al., 2005) for fitting a simple mathematical model of how protection changes with vaccine coverage. We use new data on costs and private demand for cholera vaccines in Kolkata, India, and approximate the optimal Pigouvian subsidy. We find that if the optimal subsidy is unknown, selling vaccines at full marginal cost may, under some circumstances, be a preferable second-best option to providing them for free. © 2009 by the Association for Public Policy Analysis and Management.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by John Wiley & Sons, Ltd. in its journal Journal of Policy Analysis and Management.
Volume (Year): 28 (2009)
Issue (Month): 1 ()
Contact details of provider:
Web page: http://www3.interscience.wiley.com/journal/34787/home
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Bhattacharya, Soma & Alberini, Anna & Cropper, Maureen L., 2006.
"The value of mortality risk reductions in Delhi, India,"
Policy Research Working Paper Series
3995, The World Bank.
- Soma Bhattacharya & Anna Alberini & Maureen Cropper, 2007. "The value of mortality risk reductions in Delhi, India," Journal of Risk and Uncertainty, Springer, vol. 34(1), pages 21-47, February.
- Alberini, Anna & Bhattacharya, Soma & Cropper, Maureen L., 2006. "The Value of Mortality Risk Reductions in Delhi, India," Working paper 209, Regulation2point0.
- Boulier Bryan L. & Datta Tejwant S. & Goldfarb Robert S, 2007. "Vaccination Externalities," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 7(1), pages 1-27, May.
- Francis, Peter J., 1997. "Dynamic epidemiology and the market for vaccinations," Journal of Public Economics, Elsevier, vol. 63(3), pages 383-406, February.
- Dipika Sur & Joseph Cook & Susmita Chatterjee & Jacqueline Deen & Dale Whittington, 2007. "Increasing the transparency of stated choice studies for policy analysis: Designing experiments to produce raw response graphs," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 26(1), pages 189-199.
- Suraratdecha, Chutima & Ainsworth, Martha & Tangcharoensathien, Viroj & Whittington, Dale, 2005. "The private demand for an AIDS vaccine in Thailand," Health Policy, Elsevier, vol. 71(3), pages 271-287, March.
- Geoffard, Pierre-Yves & Philipson, Tomas, 1996.
"Rational Epidemics and Their Public Control,"
International Economic Review,
Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 37(3), pages 603-24, August.
- Whittington, Dale & Sur, Dipika & Cook, Joseph & Chatterjee, Susmita & Maskery, Brian & Lahiri, Malay & Poulos, Christine & Boral, Srabani & Nyamete, Andrew & Deen, Jacqueline & Ochiai, Leon & Bhattac, 2009. "Rethinking Cholera and Typhoid Vaccination Policies for the Poor: Private Demand in Kolkata, India," World Development, Elsevier, vol. 37(2), pages 399-409, February.
- Hemenway, David, 1994. "Economics of Childhood Immunization," Economic Inquiry, Western Economic Association International, vol. 32(3), pages 519-23, July.
- Shanmugam, K R, 2001. " Self Selection Bias in the Estimates of Compensating Differentials for Job Risks in India," Journal of Risk and Uncertainty, Springer, vol. 22(3), pages 263-75, May.
- Whittington, Dale & Jeuland, Marc & Barker, Kate & Yuen, Yvonne, 2012. "Setting Priorities, Targeting Subsidies among Water, Sanitation, and Preventive Health Interventions in Developing Countries," World Development, Elsevier, vol. 40(8), pages 1546-1568.
- Jeuland, Marc & Lucas, Marcelino & Clemens, John & Whittington, Dale, 2010. "Estimating the private benefits of vaccination against cholera in Beira, Mozambique: A travel cost approach," Journal of Development Economics, Elsevier, vol. 91(2), pages 310-322, March.
- Marette, Stéphan & Roe, Brian E. & Teisl, Mario, 2012. "The welfare impact of food pathogen vaccines," Food Policy, Elsevier, vol. 37(1), pages 86-93.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing) or (Christopher F. Baum).
If references are entirely missing, you can add them using this form.