Diversify or focus: spending to combat infectious diseases when budgets are tight

Soren Anderson, Ramanan Laxminarayan () and Stephen Salant

MPRA Paper from University Library of Munich, Germany

Abstract: 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.

Keywords: public health spending; nonconvexity; dynamic programming (search for similar items in EconPapers)
JEL-codes: C61 D90 H51 I18 (search for similar items in EconPapers)
Date: 2010-02-02
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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Related works:
Journal Article: Diversify or focus? Spending to combat infectious diseases when budgets are tight (2012)
Working Paper: Diversity or Focus? Spending to Combat Infectious Diseases When Budgets Are Tight (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:21860

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