The economics of social distancing and vaccination

This paper analyzes a minimalist version of the behavioral “Susceptible-Infectious-Recovered" model of infectious disease where the incentives for endogenous social distancing take straightforward cost-benefit form. Since disease is transmitted through social interactions, the threat of spread of infection poses a collective action problem. Social distancing and vaccination serve as partial substitutes for each other, but vaccine adoption is more socially efficient because it represents a long-term commitment to risk reduction. Policies that promote vaccination (such as mandates) reductions yield increases in vaccination rates and corresponding reductions in future infection rates but policies that promote social distancing can have the paradoxical effect of increasing future infection rates by discouraging vaccine adoption.