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Optimal Vaccine Subsidies for Epidemic Diseases

Author

Listed:
  • Matthew Goodkin-Gold

    (Harvard University)

  • Michael Kremer

    (University of Chicago and NBER)

  • Christopher M. Snyder

    (Dartmouth College and NBER)

  • Heidi Williams

    (Dartmouth College and NBER)

Abstract

We analyze optimal vaccine subsidies in a model integrating disease epidemiology into a market with rational economic agents. The focus is on an intensive vaccine campaign to quell an epidemic in the short run. Across a range of market structures, positive vaccine externalities and optimal subsidies peak for diseases that spread quickly, but not so quickly that everyone is driven to be vaccinated. We assess the practical relevance of this peak—as well as the existence of increasing social returns to vaccination and optimality of universal vaccination—in calibrations to the COVID-19 pandemic.

Suggested Citation

  • Matthew Goodkin-Gold & Michael Kremer & Christopher M. Snyder & Heidi Williams, 2024. "Optimal Vaccine Subsidies for Epidemic Diseases," The Review of Economics and Statistics, MIT Press, vol. 106(4), pages 895-909, July.
    • Handle: RePEc:tpr:restat:v:106:y:2024:i:4:p:895-909
    DOI: 10.1162/rest_a_01202
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    Cited by:

    1. Romans Pancs, 2024. "A vaccine auction," Review of Economic Design, Springer;Society for Economic Design, vol. 28(4), pages 763-780, December.
    2. Wang, Fan & Xu, Danni & Zhuo, Xiaopo & Zhang, Chao & Liu, Yaoqi, 2022. "Improving consumer welfare in vaccine market: Pricing, government subsidies and consumer awareness," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 167(C).
    3. Xu, Danni & Wang, Fan & Zhuo, Xiaopo & Liu, Yaoqi, 2024. "The performance of government subsidy schemes in a competitive vaccine market considering consumers' free-riding behavior," International Journal of Production Economics, Elsevier, vol. 268(C).

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    JEL classification:

    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • D42 - Microeconomics - - Market Structure, Pricing, and Design - - - Monopoly

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