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Cost Optimization in the SIS Model of Infectious Disease with Treatment

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  • Steven M. Goldman and James Lightwood.

Abstract

We consider the intertemporal social optimization problem of minimizing the present value of the costs incurred from both disease and treatment. Though the analysis is complicated by the analytical failure of concavity, we are able to substantially characterize both the long run equilibria and the adjustment paths. The cost minimizing program is shown to exhibit a tendency towards decreased levels of treatment in the presence of higher disease levels. The socially optimal program is compared to individually rational behavior and the inefficiencies in private behavior from the infection externality are shown to cause potentially large increases in the equilibrium rate of infection.

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Bibliographic Info

Paper provided by University of California at Berkeley in its series Economics Working Papers with number 96-245.

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Date of creation: 01 Jan 1996
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Handle: RePEc:ucb:calbwp:96-245

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Cited by:
  1. St├ęphane Mechoulan, 2005. "Market Structure and Communicable Diseases," Working Papers tecipa-241, University of Toronto, Department of Economics.
  2. Telalagic, S., 2012. "Optimal Treatment of an SIS Disease with Two Strains," Cambridge Working Papers in Economics 1229, Faculty of Economics, University of Cambridge.
  3. Gersovitz, Mark & Hammer, Jeffrey S., 2005. "Tax/subsidy policies toward vector-borne infectious diseases," Journal of Public Economics, Elsevier, vol. 89(4), pages 647-674, April.
  4. Barrett, Scott & Hoel, Michael, 2007. "Optimal disease eradication," Environment and Development Economics, Cambridge University Press, vol. 12(05), pages 627-652, October.
  5. David Aadland & David Finnoff & Kevin x.d. Huang, 2013. "The Equilibrium Dynamics of Economic Epidemiology," Vanderbilt University Department of Economics Working Papers 13-00003, Vanderbilt University Department of Economics.
  6. David Aadland, 2008. "Syphilis Cycles," 2008 Meeting Papers 363, Society for Economic Dynamics.
  7. Daron Acemoglu & Azarakhsh Malekian & Asuman Ozdaglar, 2013. "Network Security and Contagion," NBER Working Papers 19174, National Bureau of Economic Research, Inc.
  8. Anderson, Soren & Laxminarayan, Ramanan & Salant, Stephen W., 2010. "Diversity or Focus? Spending to Combat Infectious Diseases When Budgets Are Tight," Discussion Papers dp-10-15, Resources For the Future.
  9. Toxvaerd, Flavio, 2010. "Infection, Acquired Immunity and Externalities in Treatment," CEPR Discussion Papers 8111, C.E.P.R. Discussion Papers.
  10. Toxvaerd, Flavio, 2010. "Recurrent Infection and Externalities in Prevention," CEPR Discussion Papers 8112, C.E.P.R. Discussion Papers.

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