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Pandemics, public policy, and Peltzman effects

Author

Listed:
  • Alexander Dietrich

    (Danmarks Nationalbank)

  • Wilhelm Kohler

    (University of Tübingen)

  • Gernot Müller

    (University of Tübingen)

Abstract

Against the backdrop of Covid-19, we study the effectiveness of public policies typically employed to fight an epidemic. We extend the compartmental SIR model to explore the trade-offs which govern individual behavior. Our stylized model allows for a closed form analysis of vaccination and lockdown policies. We establish Peltzman effects: as policies lower the risk of infections, people become more socially active, which—in turn—undermines their effectiveness. We detect patterns in data for both US states and countries in Western Europe that are consistent with the notion that such effects are shaping actual infection dynamics to a considerable extent.

Suggested Citation

  • Alexander Dietrich & Wilhelm Kohler & Gernot Müller, 2025. "Pandemics, public policy, and Peltzman effects," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 79(3), pages 889-910, May.
    • Handle: RePEc:spr:joecth:v:79:y:2025:i:3:d:10.1007_s00199-024-01605-5
    DOI: 10.1007/s00199-024-01605-5
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    Keywords

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    JEL classification:

    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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