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The economic control of infectious diseases


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  • Gersovitz, Mark
  • Hammer, Jeffrey S.


Despite interesting work on infectious diseases by such economists as Peter Francis, Michael Kremer, and Tomas Philipson, the literature does not set out the general structure of externalities involved in the prevention, and care of such diseases. The authors identify two kinds of externality. First, infectious people can infect other people, who in turn can infect others, and so on, in what the authors call the pure infection externality. In controlling their own infection, people do not take into account the social consequence of their infection. Second, in the pure prevention externality, one individual's preventive actions (such as killing mosquitoes) may directly affect the probability of others becoming infected, whether or not the preventive action succeeds for the individual undertaking it. The authors provide a general framework for discussing these externalities, and the role of government interventions to offset them. They move the discussion away from its focus on HIV (a fatal infection for which there are few interventions), and on vaccinations (which involve plausibly discrete decisions), to more general ideas of prevention, and cure applicable to many diseases for which interventions exhibit a continuum of intensities, subject to diminishing marginal returns. Infections, and actions to prevent, or cure them entail costs. Individuals balance those parts of different costs that they can actually control. In balancing costs to society, government policy should take individual behavior into account. Doing so requires a strategy combining preventive, and curative interventions, to offset both the pure infection externality, and the pure prevention externality. The relative importance of the strategy's components depends on: 1) The biology of the disease - including whether an infection is transmitted from person to person, or by vectors. 2) The possible outcomes of infection: death, recovery with susceptibility, or recovery with immunity. 3) The relative costs of the interventions. 4) Whether interventions are targeted at the population as a whole, the uninfected, the infected, or contacts between the uninfected, and the infected. 5) The behavior of individuals that leads to the two types of externalities.

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Bibliographic Info

Paper provided by The World Bank in its series Policy Research Working Paper Series with number 2607.

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Date of creation: 31 May 2001
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Handle: RePEc:wbk:wbrwps:2607

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Keywords: Disease Control&Prevention; Economic Theory&Research; Environmental Economics&Policies; Decentralization; Poverty Impact Evaluation; Economic Theory&Research; Environmental Economics&Policies; Poverty Impact Evaluation; Health Monitoring&Evaluation; Agricultural Knowledge&Information Systems;

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  1. Geoffard, P.Y. & Philipson, T., 1995. "Rational Epidemics and their Public Control," DELTA Working Papers, DELTA (Ecole normale supérieure) 95-15, DELTA (Ecole normale supérieure).
  2. Francis, Peter J., 1997. "Dynamic epidemiology and the market for vaccinations," Journal of Public Economics, Elsevier, Elsevier, vol. 63(3), pages 383-406, February.
  3. Kremer, Michael, 1996. "Integrating Behavioral Choice into Epidemiological Models of AIDS," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 111(2), pages 549-73, May.
  4. Philipson, Tomas, 2000. "Economic epidemiology and infectious diseases," Handbook of Health Economics, Elsevier, in: A. J. Culyer & J. P. Newhouse (ed.), Handbook of Health Economics, edition 1, volume 1, chapter 33, pages 1761-1799 Elsevier.
  5. Wiemer, Calla, 1987. "Optimal disease control through combined use of preventive and curative measures," Journal of Development Economics, Elsevier, Elsevier, vol. 25(2), pages 301-319, April.
  6. Brito, Dagobert L. & Sheshinski, Eytan & Intriligator, Michael D., 1991. "Externalities and compulsary vaccinations," Journal of Public Economics, Elsevier, Elsevier, vol. 45(1), pages 69-90, June.
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