Pandemics, public policy, and Peltzman effects

Alexander Dietrich (), Wilhelm Kohler () and Gernot Müller ()
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Alexander Dietrich: Danmarks Nationalbank
Wilhelm Kohler: University of Tübingen
Gernot Müller: University of Tübingen

Economic Theory, 2025, vol. 79, issue 3, No 5, 889-910

Abstract: Abstract Against the backdrop of Covid-19, we study the effectiveness of public policies typically employed to fight an epidemic. We extend the compartmental SIR model to explore the trade-offs which govern individual behavior. Our stylized model allows for a closed form analysis of vaccination and lockdown policies. We establish Peltzman effects: as policies lower the risk of infections, people become more socially active, which—in turn—undermines their effectiveness. We detect patterns in data for both US states and countries in Western Europe that are consistent with the notion that such effects are shaping actual infection dynamics to a considerable extent.

Keywords: Pandemic; Behavioral adjustment; SIR model; Risk compensation; Lockdowns; Vaccinations (search for similar items in EconPapers)
JEL-codes: I12 I18 (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1007/s00199-024-01605-5

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