Diversify or focus: spending to combat infectious diseases when budgets are tight
We consider a health authority seeking to allocate annual budgets optimally over time to minimize the discounted social cost of infection(s) evolving in a finite set of R >= 2 groups. This optimization problem is challenging, since as is well known, the standard epidemiological model describing the spread of disease (SIS) contains a nonconvexity. Standard continuous-time optimal control is of little help, since a phase diagram is needed to address the nonconvexity and this diagram is 2R dimensional (a costate and state variable for each of the R groups). Standard discrete-time dynamic programming cannot be used either, since the minimized cost function is neither concave nor convex globally. We modify the standard dynamic programming algorithm and show how familiar, elementary arguments can be used to reach conclusions about the optimal policy with any finite number of groups. We show that under certain conditions it is optimal to focus the entire annual budget on one of the R groups at a time rather than divide it among several groups, as is often done in practice; faced with two identical groups whose only difference is their starting level of infection, it is optimal to focus on the group with fewer sick people. We also show that under certain conditions it remains optimal to focus on one group when faced with a wealth constraint instead of an annual budget.
|Date of creation:||02 Feb 2010|
|Date of revision:|
|Contact details of provider:|| Postal: Ludwigstraße 33, D-80539 Munich, Germany|
Web page: https://mpra.ub.uni-muenchen.de
More information through EDIRC
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.:
- GAUDET, Gérard & HERRMANN, Markus, 2007.
"The Economic Dynamics of Antibiotic Efficacy under Open Access,"
Cahiers de recherche
04-2007, Centre interuniversitaire de recherche en économie quantitative, CIREQ.
- Herrmann, Markus & Gaudet, Gérard, 2009. "The economic dynamics of antibiotic efficacy under open access," Journal of Environmental Economics and Management, Elsevier, vol. 57(3), pages 334-350, May.
- GAUDET, Gérard & HERRMANN, Markus, 2007. "The Economic Dynamics of Antibiotic Efficacy under Open Access," Cahiers de recherche 2007-04, Universite de Montreal, Departement de sciences economiques.
- Mark Gersovitz & Jeffrey S. Hammer, 2004.
"The Economical Control of Infectious Diseases,"
Royal Economic Society, vol. 114(492), pages 1-27, 01.
- Gersovitz, Mark & Hammer, Jeffrey S., 2005. "Tax/subsidy policies toward vector-borne infectious diseases," Journal of Public Economics, Elsevier, vol. 89(4), pages 647-674, April.
- Gardner Brown & Ramanan Laxminarayan, 1998.
"Economics of Antibiotic Resistance,"
Discussion Papers in Economics at the University of Washington
0060, Department of Economics at the University of Washington.
- Goldman, Steven M. & Lightwood, James, 1996.
"Cost Optimization in the SIS Model of Infectious Disease with Treatment,"
Department of Economics, Working Paper Series
qt0r88q87t, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
- Goldman Steven Marc & Lightwood James, 2002. "Cost Optimization in the SIS Model of Infectious Disease with Treatment," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 2(1), pages 1-24, April.
- Steven M. Goldman and James Lightwood., 1996. "Cost Optimization in the SIS Model of Infectious Disease with Treatment," Economics Working Papers 96-245, University of California at Berkeley.
- Lars Olson & Santanu Roy, 2008. "Controlling a biological invasion: a non-classical dynamic economic model," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 36(3), pages 453-469, September.
- Philipson, Tomas J & Posner, Richard A, 1996. "The Economic Epidemiology of Crime," Journal of Law and Economics, University of Chicago Press, vol. 39(2), pages 405-33, October.
- Alan D. Lopez & Colin D. Mathers & Majid Ezzati & Dean T. Jamison & Christopher J. L. Murray, 2006. "Global Burden of Disease and Risk Factors," World Bank Publications, The World Bank, number 7039, April.
- Mark Eiswerth & Wayne Johnson, 2002. "Managing Nonindigenous Invasive Species: Insights from Dynamic Analysis," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 23(3), pages 319-342, November.
- Laxminarayan, Ramanan, 2003. "ACT Now or Later: The Economics of Malaria Resistance," Discussion Papers dp-03-51, Resources For the Future.
When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:21860. 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: (Joachim Winter)
If references are entirely missing, you can add them using this form.