Economics at your fingertips  

Optimal Vaccine Policies: Spillovers and Incentives

Nikhil Vellodi and Joshua Weiss

No 21-06, Working Paper from Federal Reserve Bank of Richmond

Abstract: We offer a novel theoretical framework to study optimal vaccination policies. The key features of the model are that agents: 1) differ both in their potential exposure (x) to others and vulnerability (y​) to severe illness, 2) exert negative externalities through interaction, and 3) can take voluntary preventative measures, for instance self-isolation. Our main result is a complete characterization of the second-best policy. Three striking features emerge. First, it is non-monotone – people with intermediate y are vaccinated more than those with either low or high y. Second, it exhibits an exposure premium among those who do not self-isolate – people with higher x require lower overall risk, xy, to be vaccinated. Third, for those who voluntarily self-isolate, it is invariant to y, depending only upon x. Numerical results demonstrate that policies vaccinating only the most vulnerable perform significantly worse than other simple heuristics, especially when supplies are limited.

Pages: 47
Date: 2021-03-24
New Economics Papers: this item is included in nep-mic
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed

Downloads: (external link) ... ers/2021/wp21-06.pdf Full text (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

Ordering information: This working paper can be ordered from

Access Statistics for this paper

More papers in Working Paper from Federal Reserve Bank of Richmond Contact information at EDIRC.
Bibliographic data for series maintained by ().

Page updated 2021-05-09
Handle: RePEc:fip:fedrwp:90446