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Rein in pandemic by pricing vaccine: Does social trust matter?

Author

Listed:
  • Upasak Das

    (Global Development Institute, University of Manchester)

  • Rupayan Pal

    (Indira Gandhi Institute of Development Research)

  • Udayan Rathore

    (Oxford Policy Management)

  • Bibhas Saha

    (Durham University Business School)

Abstract

In this paper, we explore the role of Generalized Social Trust (GST) in promoting public health during pandemics. We theorize and empirically test the effect of GST on individual's likelihood (LTP) and willingness to pay (WTP) for vaccines of different efficacy. Using survey data from Madhya Pradesh, India, which was collected just before the COVID-19 vaccine rollout in 2021, we find a positive role of GST in promoting LTP and WTP for different vaccine variants. Our identification strategy relies on exogeneous variation in out-group trust of neighbors of respondents as instrument variables. The findings are robust to multiple internal validity checks. Importantly, we find that when efficacy of the vaccine falls, the marginal effects of GST on LTP and WTP increase. The finding suggests that when an individual with higher GST faces a higher chance of infecting others through availability of lower efficacy vaccine, she is less likely to free ride and thus pay more at the margin.

Suggested Citation

  • Upasak Das & Rupayan Pal & Udayan Rathore & Bibhas Saha, 2023. "Rein in pandemic by pricing vaccine: Does social trust matter?," Indira Gandhi Institute of Development Research, Mumbai Working Papers 2023-008, Indira Gandhi Institute of Development Research, Mumbai, India.
    • Handle: RePEc:ind:igiwpp:2023-008
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    File URL: http://www.igidr.ac.in/pdf/publication/WP-2023-008.pdf
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Social trust; Vaccine efficacy; COVID-19; Outer-group trust; Willingness to Pay;
    All these keywords.

    JEL classification:

    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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