Uncertainty in Healthcare Policy Decisions: An Epidemiological Real Options Approach to COVID-19 Lockdown Exits

F.; de Mello-Sampayo,

Health, Econometrics and Data Group (HEDG) Working Papers from HEDG, c/o Department of Economics, University of York

Abstract: Uncertainty significantly influences healthcare policy decisions, especially regarding lockdown exits amid pandemics. This paper examines different uncertainties affecting stayat-home and essential workers concerning COVID-19 exposure. Using an epidemiological real options model, we assess how uncertainty impacts the decision to end lockdown without causing disease resurgence. Results indicate higher policy-change value lengthens the lockdown delay. Greater shock correlation between stay-at-home and mask-only populations reduces this value, leading to earlier lockdown exits. The findings bridge discrepancies between public health recommendations and policymakers actions. Integrating options theory enables more informed decision-making by considering uncertain risks and outcomes.

Keywords: public health strategy; uncertainty; real options; mitigation measures; lockdown (search for similar items in EconPapers)
JEL-codes: C61 H12 I18 (search for similar items in EconPapers)
Date: 2024-01
New Economics Papers: this item is included in nep-hea
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