Using private demand studies to calculate socially optimal vaccine subsidies in developing countries
Although it is well known that vaccines against many infectious diseases confer positive economic externalities via indirect protection, analysts have typically ignored possible herd protection effects in policy analyses of vaccination programs. Despite a growing literature on the economic theory of vaccine externalities and several innovative mathematical modeling approaches, there have been almost no empirical applications. The first objective of the paper is to develop a transparent, accessible economic framework for assessing the private and social economic benefits of vaccination. We also describe how stated preference studies (for example, contingent valuation and choice modeling) can be useful sources of economic data for this analytic framework. We demonstrate socially optimal policies using a graphical approach, starting with a standard textbook depiction of Pigouvian subsidies applied to herd protection from vaccination programs. We also describe nonstandard depictions that highlight some counterintuitive implications of herd protection that we feel are not commonly understood in the applied policy literature. We illustrate the approach using economic and epidemiological data from two neighborhoods in Kolkata, India. We use recently published epidemiological data on the indirect effects of cholera vaccination in Matlab, Bangladesh (Ali et al., 2005) for fitting a simple mathematical model of how protection changes with vaccine coverage. We use new data on costs and private demand for cholera vaccines in Kolkata, India, and approximate the optimal Pigouvian subsidy. We find that if the optimal subsidy is unknown, selling vaccines at full marginal cost may, under some circumstances, be a preferable second-best option to providing them for free. © 2009 by the Association for Public Policy Analysis and Management.
Volume (Year): 28 (2009)
Issue (Month): 1 ()
|Contact details of provider:|| Web page: http://www3.interscience.wiley.com/journal/34787/home|
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- John Mullahy, 1999.
"It'll only hurt a second? Microeconomic determinants of who gets flu shots,"
John Wiley & Sons, Ltd., vol. 8(1), pages 9-24.
- John Mullahy, 1998. "It'll Only Hurt a Second? Microeconomic Determinants of Who Gets Flu Shots," NBER Working Papers 6500, National Bureau of Economic Research, Inc.
- Geoffard, Pierre-Yves & Philipson, Tomas, 1996.
"Rational Epidemics and Their Public Control,"
International Economic Review,
Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 37(3), pages 603-24, August.
- Soma Bhattacharya & Anna Alberini & Maureen Cropper, 2007.
"The value of mortality risk reductions in Delhi, India,"
Journal of Risk and Uncertainty,
Springer, vol. 34(1), pages 21-47, February.
- Bhattacharya, Soma & Alberini, Anna & Cropper, Maureen L., 2006. "The value of mortality risk reductions in Delhi, India," Policy Research Working Paper Series 3995, The World Bank.
- Hemenway, David, 1994. "Economics of Childhood Immunization," Economic Inquiry, Western Economic Association International, vol. 32(3), pages 519-23, July.
- Francis, Peter J., 1997. "Dynamic epidemiology and the market for vaccinations," Journal of Public Economics, Elsevier, vol. 63(3), pages 383-406, February.
- Tomas Philipson, 1996. "Private Vaccination and Public Health: An Empirical Examination for U.S. Measles," Journal of Human Resources, University of Wisconsin Press, vol. 31(3), pages 611-630.
- Boulier Bryan L. & Datta Tejwant S. & Goldfarb Robert S, 2007. "Vaccination Externalities," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 7(1), pages 1-27, May.
- Dipika Sur & Joseph Cook & Susmita Chatterjee & Jacqueline Deen & Dale Whittington, 2007. "Increasing the transparency of stated choice studies for policy analysis: Designing experiments to produce raw response graphs," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 26(1), pages 189-199.
- Avner Ahituv & V. Joseph Hotz & Tomas Philipson, .
"Will the AIDS Epidemic be Self-Limiting? Evidence on the Responsiveness of the Demand for Condoms to the Prevalence of AIDS,"
University of Chicago - Population Research Center
93-3, Chicago - Population Research Center.
- Avner Ahituv & V. Joseph Hotz & Tomas Philipson, 1994. "Will the AIDS Epidemic be Self-Limiting? Evidence on the Responsiveness of the Demand for Condoms to the Prevalence of AIDS," Working Papers 9401, Harris School of Public Policy Studies, University of Chicago.
- Shanmugam, K R, 2001. "Self Selection Bias in the Estimates of Compensating Differentials for Job Risks in India," Journal of Risk and Uncertainty, Springer, vol. 22(3), pages 263-75, May.
- Suraratdecha, Chutima & Ainsworth, Martha & Tangcharoensathien, Viroj & Whittington, Dale, 2005. "The private demand for an AIDS vaccine in Thailand," Health Policy, Elsevier, vol. 71(3), pages 271-287, March.
- Whittington, Dale & Sur, Dipika & Cook, Joseph & Chatterjee, Susmita & Maskery, Brian & Lahiri, Malay & Poulos, Christine & Boral, Srabani & Nyamete, Andrew & Deen, Jacqueline & Ochiai, Leon & Bhattac, 2009. "Rethinking Cholera and Typhoid Vaccination Policies for the Poor: Private Demand in Kolkata, India," World Development, Elsevier, vol. 37(2), pages 399-409, February.
When requesting a correction, please mention this item's handle: RePEc:wly:jpamgt:v:28:y:2009:i:1:p:6-28. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing)or (Christopher F. Baum)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.