Public and private incentives for self-protection

François Salanié and Nicolas Treich

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Abstract: Governments sometimes encourage or impose individual self-protection measures, such as wearing a protective mask in public during an epidemic. However, by reducing the risk of being infected by others, more self-protection may lead each individual to go outside the house more often. In the absence of lockdown, this creates a "collective offsetting effect", since more people outside means that the risk of infection is increased for all. However, wearing masks also creates a positive externality on others, by reducing the risk of infecting them. We show how to integrate these different effects in a simple model, and we discuss when self-protection efforts should be encouraged (or deterred) by a social planner.

Date: 2020-07
New Economics Papers: this item is included in nep-cdm and nep-mic
Note: View the original document on HAL open archive server: https://hal.science/hal-02929306v1
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Published in Geneva Risk and Insurance Review, 2020, 45 (2), pp.104-113. ⟨10.1057/s10713-020-00050-3⟩

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Journal Article: Public and private incentives for self-protection (2020)
Working Paper: Public and private incentives for self-protection (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-02929306

DOI: 10.1057/s10713-020-00050-3

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