nep-hea New Economics Papers
on Health Economics
Issue of 2022‒06‒13
twenty-one papers chosen by
Nicolas R. Ziebarth
Cornell University

  1. The Opioid Crisis, Health, Healthcare, and Crime: A Review Of Quasi-Experimental Economic Studies By Johanna Catherine Maclean; Justine Mallatt; Christopher J. Ruhm; Kosali I. Simon
  2. Dangerous Prescribing and Healthcare Fragmentation: Evidence from Opioids By Keith Marzilli Ericson; Adam Sacarny; R. Annetta Zhou
  3. Why Does Disability Increase During Recessions? Evidence from Medicare By Colleen Carey; Nolan H. Miller; David Molitor
  4. Safeguarding Consumers through Minimum Quality Standards: Milk Inspections and Urban Mortality, 1880-1910 By Anderson, D. Mark; Charles, Kerwin Kofi; McKelligott, Michael; Rees, Daniel I.
  5. The impact of mental health support for the chronically ill on hospital utilisation: evidence from the UK By Jonathan Gruber; Grace Lordan; Stephen Pilling; Carol Propper; Rob Saunders
  6. Physicians and the Production of Health: Returns to Health Care during the Mortality Transition By Liebert, Helge; Mäder, Beatrice
  7. Beyond Barker: Infant Mortality at Birth and Ischaemic Heart Disease in Older Age By Baker, Samuel; Biroli, Pietro; van Kippersluis, Hans; von Hinke Kessler Scholder, Stephanie
  8. Specification of the Health Production Function and its Behavioral Implications By Bolin, Kristian; Caputo, Michael R
  9. Does Your Doctor Matter? Doctor Quality and Patient Outcomes By Ginja, Rita; Riise, Julie; Willage, Barton; Willén, Alexander
  10. International comparisons of the quality and outcomes of integrated care: Findings of the OECD pilot on stroke and chronic heart failure By Eliana Barrenho; Philip Haywood; Candan Kendir; Nicolaas S. Klazinga
  11. Does Schooling Improve Cognitive Abilities at Older Ages: Causal Evidence from Nonparametric Bounds By Vikesh Amin; Jere R. Behrman; Jason M. Fletcher; Carlos A. Flores; Alfonso Flores-Lagunes; Hans-Peter Kohler
  12. The Impact of Social Assistance Programmes in a Pandemic: Evidence from Kenya By Strupat , Christoph; Nshakira-Rukundo, Emmanuel
  13. A european equivalence scale for public in-kind transfers By Rolf Aaberge; Audun Langørgen; Petter Y. Lindgren
  14. Housing Unaffordability and Adolescent Subjective Well-Being in China By Nie, Peng; Li, Qiaoge; Sousa-Poza, Alfonso
  15. Optimising cost-effectiveness of pandemic response under partial intervention measures By Quang Dang Nguyen; Mikhail Prokopenko
  16. Pandemic Depression: COVID-19 and the Mental Health of the Self-Employed By Marco Caliendo; Daniel Graeber; Alexander S. Kritikos; Johannes Seebauer
  17. Optimal Travel Restrictions in Epidemics By Shi, Wei; Qiu, Yun; Yu, Pei; Chen, Xi
  18. Who Protests, What Do They Protest, and Why? By Erica Chenoweth; Barton H. Hamilton; Hedwig Lee; Nicholas W. Papageorge; Stephen P. Roll; Matthew V. Zahn
  19. Understanding the positive effects of the COVID-19 pandemic on women’s fertility in Norway By Trude Lappegård; Tom Kornstad; Lars Dommermuth; Axel Peter Kristensen
  20. Hiding the Elephant: The Tragedy of COVID Policy and Its Economist Apologists By Foster, Gigi; Frijters, Paul
  21. Optimal Vaccination in a SIRS Epidemic Model By Federico, Salvatore; Ferrari, Giorgio; Torrente, Maria-Laura

  1. By: Johanna Catherine Maclean; Justine Mallatt; Christopher J. Ruhm; Kosali I. Simon
    Abstract: Opioid use is one of the most substantial and long-lasting public health crises faced by the United States. This crisis, which began by the mid-1990s and continues through the time of writing, causes 136 fatal opioid overdoses each day and costs the U.S. at least $596 billion each year. These numbers, while incredibly large, likely do not capture the full toll of the crisis on American society. In this study, we review quasi-experimental studies that examine the relationship between opioids and health and healthcare, and crime outcomes in the U.S. We focus on the U.S., a country particularly hard hit by the crisis which has adopted a broad array of policies aimed at curbing it. Our findings align with the general perception that the opioid crisis has negatively impacted a range of health outcomes and increased healthcare costs, with limited evidence that opioids (which are designed to reduce chronic pain) have enhanced work capacity or other metrics that might capture intended benefits from appropriate use of these medications. While opioids have worsened many health outcomes, the healthcare system played a role in the emergence of the epidemic and its continuation. Further, studies suggest that opioids increase crime, although the link is not as strong as has been observed in previous drug epidemics; this finding is consistent with the pharmacological difference between opioids and stimulant substances (e.g., cocaine) that dominated earlier drug epidemic periods characterized by higher levels of crime. Through the provision of treatment to address underlying addiction and the development of strategies to effectively curtail access to opioids, the healthcare system potentially has an important role in attempts to end the crisis.
    JEL: I1
    Date: 2022–04
  2. By: Keith Marzilli Ericson; Adam Sacarny; R. Annetta Zhou
    Abstract: Fragmented healthcare received from many different physicians results in higher costs and lower quality, but does it contribute to dangerous opioid prescribing? The effect is theoretically ambiguous because fragmentation can trigger costly coordination failures but also permits greater specialization. We examine dangerous opioid prescribing, defined as receiving high dosages, long prescription durations, or harmfully interacting medications. Cross-sectionally, regions with higher fragmentation have lower levels of dangerous opioid prescribing. This relationship is associational and may result from unobserved patient-level confounders. Identifying the impact of healthcare fragmentation by examining patients who move across regions, we find a relatively precise null effect of fragmentation on dangerous opioid prescribing. These results cast doubt on the role of fragmentation in this phenomenon and highlight the potential role of other forces in driving it.
    JEL: I11 I12 L14 L22
    Date: 2022–04
  3. By: Colleen Carey; Nolan H. Miller; David Molitor
    Abstract: Social Security Disability Insurance (DI) awards rise in recessions and fall in expansions, especially for older adults. Using Medicare administrative data for DI entrants between 1991 and 2015, we provide new evidence on the health of DI recipients who enter at different ages and points in the business cycle. We find that each percentage point increase in unemployment at the time of application corresponds to 4.2% more awards and 0.4% lower Medicare spending among new entrants. We then investigate whether this relationship is driven by changes in health, with deteriorating economic conditions making individuals less healthy, or by changes in the cost of entering DI. To separate these two channels, we leverage a feature of the DI determination process that sharply relaxes the eligibility criteria at ages 50 and 55. We find that marginal DI entrants have similar spending regardless of whether they were induced to enter by poor economic conditions or by the age discontinuities in the eligibility criteria. The findings suggest that changes in entry costs can fully account for cyclical DI entry.
    JEL: H51 J14 J68
    Date: 2022–04
  4. By: Anderson, D. Mark (Montana State University); Charles, Kerwin Kofi (Yale University); McKelligott, Michael (University of Chicago); Rees, Daniel I. (Universidad Carlos III de Madrid)
    Abstract: We examine the effect of enforcing minimum quality standards (MQSs) on consumer health. In the late 1800s, the urban milk supply was regularly skimmed and diluted with water, but consumers could not easily determine its quality because dyes, caramel, and salt were added. To protect consumers, milk inspectors were tasked with enforcing a well-defined MQS. Using city-level data for the period 1880-1910, we find that milk inspections reduced mortality from waterborne and foodborne diseases by 8-19 percent. Ours is the first study to provide evidence that MQSs can improve consumer health when directly applied to an experience or credence good.
    Keywords: milk inspections, infant mortality, waterborne mortality, urban mortality
    JEL: H75 I18 J18 L51 N31
    Date: 2022–05
  5. By: Jonathan Gruber; Grace Lordan; Stephen Pilling; Carol Propper; Rob Saunders
    Abstract: Individuals with common mental disorders (CMDs) such as depression and anxiety frequently have co-occurring long-term physical health conditions (LTCs) and this co-occurrence is associated with higher hospital utilisation. Psychological treatment for CMDs may reduce healthcare utilisation through better management of the LTC, but there is little previous research. We examined the impact of psychological treatment delivered under the nationwide Improving Access to Psychological Therapies (IAPT) programme in England on hospital utilisation 12-months after the end of IAPT treatment. We examined three types of hospital utilisation: Inpatient treatment, Outpatient treatment and Emergency room attendance. We examined individuals with Chronic Obstructive Pulmonary Disease (COPD) (n=816), Diabetes (n=2813) or Cardiovascular Disease (CVD) (n=4115) who received psychological treatment between April 2014 and March 2016. IAPT episode data was linked to hospital utilisation data which went up March 2017. Changes in the probability of hospital utilisation were compared to a matched control sample for each LTC. Individuals in the control sample received IAPT treatment between April 2017 and March 2018. Compared to the control sample, the treated sample had significant reductions in the probability of all three types of hospital utilisation, for all three LTCs 12-months after the end of IAPT treatment. Reductions in utilisation of Emergency Room, Outpatient and non-elective Inpatient treatment were also observed immediately following the end of psychological treatment, and 6-months after, for individuals with diabetes and CVD, compared to the matched sample. These findings suggest that psychological interventions for CMDs delivered to individuals with co-occurring long-term chronic conditions may reduce the probability of utilisation of hospital services. Our results support the roll-out of psychological treatment aimed at individuals who have co-occurring common mental disorders and long-term chronic conditions.
    Keywords: depression, hospital utilisation, psychological interventions, chronic conditions
    Date: 2022–12
  6. By: Liebert, Helge (University of Zurich); Mäder, Beatrice (University of St. Gallen)
    Abstract: This paper investigates the returns to health care provision during the mortality transition. We construct a new panel data set covering German municipalities from 1928 to 1936. The endogeneity of health care supply is addressed by using the expulsion of Jewish physicians from statutory health insurance as exogenous variation in regional physician supply. Increases in the supply of physicians reduce infant mortality and mortality from common childhood diseases. Using a semiparametric control function approach, we find diminishing marginal returns to health care provision. The results are consistent with historical trends in infant mortality over the 20th century.
    Keywords: infant mortality, physicians, health care supply, mortality transition, semiparametric IV
    JEL: I10 I18 N34
    Date: 2022–04
  7. By: Baker, Samuel (University of Bristol); Biroli, Pietro (University of Bologna); van Kippersluis, Hans (Erasmus University Rotterdam); von Hinke Kessler Scholder, Stephanie (University of Bristol)
    Abstract: Adverse conditions in early life can have consequential impacts on individuals' health in older age. In one of the first papers on this topic, Barker and Osmond (1986) show a strong positive relationship between infant mortality rates in the 1920s and ischaemic heart disease in the 1970s. We go 'beyond Barker', first by showing that this relationship is robust to the inclusion of local geographic area fixed effects, but not family fixed effects. Second, we explore whether the average effects conceal underlying heterogeneity: we examine if the infant mortality effect offsets or reinforces one's genetic predisposition for heart disease. We find considerable heterogeneity that is robust to within-area as well as within-family analyses. Our findings show that the effects of one's early life environments mainly affect individuals with the highest genetic risk for developing heart disease. Put differently, in areas with the lowest infant mortality rates, the effect of one's genetic predisposition effectively vanishes. These findings suggests that advantageous environments can cushion one's genetic risk of developing heart disease.
    Keywords: gene-environment interplay, developmental origins, Barker hypothesis
    JEL: I10 I14 I19
    Date: 2022–05
  8. By: Bolin, Kristian (Department of Economics, School of Business, Economics and Law, Göteborg University); Caputo, Michael R (University of Central Florida)
    Abstract: The health production function of the canonical health-capital model is generalized to allow the state of health to affect the total and marginal products of health investment. If the total and marginal products of health investment are nonincreasing functions of the state of health, then the solution of the generalized model is locally qualitatively identical to that of the canonical model. Moreover, in contrast to the canonical model, the generalized model is able to rationalize the cycling of the state of health and health investment observed in some individuals. The necessary conditions on the health production function for cyclical behavior are identified as well.
    Keywords: health investment; health production function; health stock; optimal control
    JEL: D15 I12 I18
    Date: 2022–05
  9. By: Ginja, Rita (University of Bergen); Riise, Julie (University of Bergen); Willage, Barton (University of Colorado, Denver); Willén, Alexander (Dept. of Economics, Norwegian School of Economics and Business Administration)
    Abstract: We estimate doctor value-added and provide evidence on the distribution of physician quality in an entire country, combining rich population-wide register data with random assignment of patients to general practitioners (GPs). We show that there is substantial variation in the quality of physicians, as measured by patients’ post-assignment mortality, in the primary care sector. Specifically, a one standard deviation increase in doctor quality is associated with a 12.2percentage point decline in a patient’s two-year mortality risk. While we find evidence of observable doctor characteristics and practice styles influencing a GP’s value-added, a standard decomposition exercise reveals that most of the quality variation is driven by unobserved differences across doctors. Finally, we show that patients are unable to identify who the highquality doctors are, and that patient-generated GP ratings are uncorrelated with GP value-added. Using a lower bound of the predicted value of an additional life year in Norway ($35,000), our results demonstrate that replacing the worst performing GPs (bottom 5 percent of the VA distribution) with GPs of average quality generates a social benefit of $27,417 per patient, $9.05 million per GP, or $934 million in total. At the same time, our results show that higher-quality GPs are associated with a lower per-patient cost.
    Keywords: Value-added; health behaviors; mortality rate
    JEL: H75 I11 I14 J18
    Date: 2022–06–05
  10. By: Eliana Barrenho (OECD); Philip Haywood (OECD); Candan Kendir (OECD); Nicolaas S. Klazinga (OECD)
    Abstract: Across OECD countries, two in three people aged over 65 years live with at least one chronic condition often requiring multiple interactions with different providers, making them more susceptible to poor and fragmented care. This has prompted calls for making health systems more people-centred, capable of delivering high-quality integrated care. Despite promising, mostly local-level, experiences, systems remain fragmented, focused on acute care and unsuitable to solve complex needs. Moreover, assessing and comparing the benefits of integrated care remains difficult given the lack of technically sound, policy-relevant indicators. This report presents the results of the first OECD pilot of a new generation of indicators to support international benchmarking of quality of integrated care. Lessons from the pilot call for further work on: (1) expanding work on indicator development; (2) performing policy analysis to understand cross-country variations on governance models and health financing; (3) upscaling data linkage; and (4) measuring care fragmentation.
    JEL: I10 I14
    Date: 2022–05–24
  11. By: Vikesh Amin (Central Michigan University); Jere R. Behrman (University of Pennsylvania); Jason M. Fletcher (University of Wisconsin-Madison, NBER, and IZA); Carlos A. Flores (California Polytechnic State University); Alfonso Flores-Lagunes (Syracuse University, IZA, and GLO); Hans-Peter Kohler (University of Pennsylvania)
    Abstract: We revisit the much-investigated relationship between schooling and health, focusing on cognitive abilities at older ages using the Harmonized Cognition Assessment Protocol in the Health & Retirement Study. To address endogeneity concerns, we employ a nonparametric partial identification approach that provides bounds on the population average treatment effect using a monotone instrumental variable together with relatively weak monotonicity assumptions on treatment selection and response. The bounds indicate potentially large effects of increasing schooling from primary to secondary but are also consistent with small and null effects. We find evidence for a causal effect of increasing schooling from secondary to tertiary on cognition. We also replicate findings from the Health & Retirement Study using another sample of older adults from the Midlife in United States Development Study Cognition Project.
    Keywords: Schooling, Cognition, Bounds, Aging, Partial Identification
    JEL: I10 I26 J14
    Date: 2022–05–20
  12. By: Strupat , Christoph; Nshakira-Rukundo, Emmanuel
    Abstract: This paper examines whether social protection – in the form of existing social assistance programmes - affects measures of household well-being such as poverty, food security and costly risk-coping behaviour during the COVID-19 pandemic. Using primary data from nationally representative, in-person surveys in Kenya allows the exploration of the impacts of major social assistance programmes. Our analysis employs the doubly robust difference-in-differences approach to estimate the impacts of social assistance programmes on common measures of household welfare. We find that social assistance programmes significantly reduce the prevalence of economic shocks and the further impoverishment of beneficiaries during the pandemic. Furthermore, households with social assistance coverage are less likely to sell assets as a coping strategy. Overall, the results suggest that, during a systematic crisis such as a pandemic, pre-existing social assistance schemes can deliver positive impacts in line with the primary goals of social safety nets and prevent households from falling deeper into poverty by preserving their asset base.
    Keywords: Health Economics and Policy, Public Economics
    Date: 2022–05–22
  13. By: Rolf Aaberge; Audun Langørgen; Petter Y. Lindgren (Statistics Norway)
    Abstract: This paper introduces a theory-based equivalence scale for public in-kind transfers, which justifies comparison of distributions of extended income (cash income plus the value of public services) between European countries. We demonstrate the usefulness of the proposed equivalence scale in an empirical analysis of the effects of public health care, long-term care, education and childcare expenditure on estimates of income inequality and poverty for 24 European countries. The empirical results show significant effects of public in-kind transfers on the level of income inequality and poverty for all countries. Over the period 2006–2018, inequality and poverty estimates display rather different trends across European countries.
    Keywords: Income distribution; poverty; equivalence scales; needs adjustment; public services; inkind transfers
    JEL: D30 H40 I30
    Date: 2022–05
  14. By: Nie, Peng (Xi’an Jiaotong University); Li, Qiaoge (Xi’an Jiaotong University); Sousa-Poza, Alfonso (University of Hohenheim)
    Abstract: Using the 2010-2018 waves of the China Family Panel Studies, we investigate the impact of housing unaffordability on subjective well-being (SWB) among Chinese adolescents aged 10-15. Using a combined methodology of propensity score matching and fixed effects and instrumental variable estimations, we show that housing unaffordability leads to higher levels of depression, with more pronounced impacts among older adolescents (aged 13-15), those from migrant and urban families, and those living in regions with high housing prices and expensive living costs. These results are robust not only to alternative housing unaffordability and SWB measures but to a series of estimation approaches that control for endogeneity. An additional structural equation modelling analysis of underlying pathways further reveals that this housing unaffordability-SWB relation is mediated by paternal depression and (lower) adolescent trust in parents.
    Keywords: housing unaffordability, depression, adolescents, China
    JEL: D10 I10 I31 J13 R21
    Date: 2022–05
  15. By: Quang Dang Nguyen; Mikhail Prokopenko
    Abstract: The COVID-19 pandemic created enormous public health and socioeconomic challenges. The health effects of vaccination and non-pharmaceutical interventions (NPIs) were often contrasted with significant social and economic costs. We describe a general framework aimed to derive adaptive cost-effective interventions, adequate for both recent and emerging pandemic threats. We also quantify the net health benefits and propose a reinforcement learning approach to optimise adaptive NPIs. The approach utilises an agent-based model simulating pandemic responses in Australia, and accounts for a heterogeneous population with variable levels of compliance fluctuating over time and across individuals. Our analysis shows that a significant net health benefit may be attained by adaptive NPIs formed by partial social distancing measures, coupled with moderate levels of the society's willingness to pay for health losses. We demonstrate that a socially acceptable balance between health effects and incurred economic costs is achievable over a long term, despite possible early setbacks.
    Date: 2022–05
  16. By: Marco Caliendo (University of Potsdam, IZA Bonn, DIW Berlin, IAB Nuremberg); Daniel Graeber (DIW Berlin, University of Potsdam); Alexander S. Kritikos (DIW Berlin, University of Potsdam, IAB Nuremberg, IZA Bonn); Johannes Seebauer (DIW Berlin, Freie Universität Berlin)
    Abstract: We investigate the effect of the COVID-19 pandemic on self-employed people’s mental health. Using representative longitudinal survey data from Germany, we reveal differential effects by gender: whereas self-employed women experienced a substantial deterioration in their mental health, self-employed men displayed no significant changes up to early 2021. Financial losses are important in explaining these differences. In addition, we find larger mental health responses among self-employed women who were directly affected by government-imposed restrictions and bore an increased childcare burden due to school and daycare closures. We also find that self-employed individuals who are more resilient coped better with the crisis.
    Keywords: self-employment, COVID-19, mental health, gender, representative longitudinal survey data, PHQ-4 score, resilience
    JEL: L26 D31 I14 I18 J16
    Date: 2022–05
  17. By: Shi, Wei (Jinan University); Qiu, Yun (Jinan University); Yu, Pei (Rice University); Chen, Xi (Yale University)
    Abstract: Travel restrictions are often imposed to limit the spread of infectious diseases. As uniform restrictions can be inefficient and incur unnecessarily high costs, this paper examines the optimal design of restrictions that target specific travel routes. We propose a model with trade-offs between costs of infections and costs of travel restrictions, where decisions are made with or without coordination between local jurisdictions and provide a computational feasible way to solve the optimization problem. We illustrate the model using the COVID-19 data in China. When travel restrictions target key routes, only around 5% of the possible routes need to be closed in order to have the same number of confirmed COVID-19 cases in the initial outbreaks. Uncoordinated travel restrictions ignore policy externalities and therefore are sub-optimal in comparison to coordinated restrictions.
    Keywords: transmission, public health, economic cost, coordination, externality, COVID-19
    JEL: I18 R1 C21 C6
    Date: 2022–05
  18. By: Erica Chenoweth; Barton H. Hamilton; Hedwig Lee; Nicholas W. Papageorge; Stephen P. Roll; Matthew V. Zahn
    Abstract: We examine individuals’ decisions to attend protests during the summer of 2020. Our analysis examines two simultaneous movements: Black Lives Matter along with protests calling for less stringent public health measures to combat the COVID-19 (e.g., for swifter reopening of businesses). Our analysis is made possible by a unique staggered panel data set that is representative of the U.S., which was initially constructed to study COVID-19 and contains a host of sociodemographic, health, and economic variables. A wave of data collected in the summer of 2020 includes explicit variables on protest attendance, political views, and support for different movements. We link this data set to several others to explore factors that could influence attendance decisions, such as local histories of police violence and time-varying infection rates. We find that protest participants are a diverse set of individuals who are representative of the U.S. population—even more so than are voters on some demographic dimensions. We also provide evidence suggesting that protesting appears to be rational, i.e., a deliberate and intentional choice to be civically engaged that is responsive to costs and issue salience; one that, for some individuals, functions as an alternative to voting. Finally, we provide novel evidence of overlap: attending a Black Lives Matter protest increases the likelihood of attending a protest calling for fewer public health restrictions. Together, our findings challenge claims by partisan pundits that protests are driven by extremists with fringe views or that the 2020 movements were diametrically opposed along partisan identity lines. The novelty of our findings suggests that protest is a form of civic engagement that can draw attention to societal preferences broadly held by a kind of silent majority, one whose views might otherwise remain obscured by dominant narratives insisting we are hopelessly polarized.
    JEL: H00 H8 Z10
    Date: 2022–04
  19. By: Trude Lappegård; Tom Kornstad; Lars Dommermuth (Statistics Norway); Axel Peter Kristensen
    Abstract: This study examines the effect of the COVID-19 pandemic on fertility in Norway at the individual level. Studies using data at the macro level have found a positive short-term effect of the pandemic on fertility level in Norway, but women’s fertility response to the pandemic may differ depending on their life situation. We use the first lockdown on March 12, 2020 as a marker of the pandemic and apply a regression discontinuity design to compare births of women that were conceived before the pandemic started with those conceived during the first eight months of the pandemic. The positive effect on women’s fertility in Norway was mainly driven by women in life phases that have generally high fertility rates (women aged 28–35 years and women who already have children). These groups are likely to be in an economic and socially secure and stable situation in which the restrictions due to the pandemic had limited influence. Besides two exceptions, we do not find differences in the effect of the pandemic on childbearing by women’s work situation. This is most likely related to the strong welfare state and the generous additional pandemic-related measures taken by the Norwegian government.
    Keywords: Fertility; Demography; COVID-19; Regression discontinuity design
    JEL: J13 J11 I24
    Date: 2022–05
  20. By: Foster, Gigi (University of New South Wales); Frijters, Paul (London School of Economics)
    Abstract: In 2020 and 2021, the world witnessed policies that caused enormous net damage to nearly every country. We demonstrate the usefulness of the new WELLBY currency in gauging the costs and benefits of COVID policies and review the contributions of Australian economists to the scholarly and public debates about these policies. Our analysis documents the value of what was destroyed, the weak resistance mounted by the Australian economics profession during this period, and the role played by many Australian economists as apologists for Australia's most catastrophic peacetime economic policy failure. We close with ideas for working towards a better future.
    Keywords: COVID-19, economics profession, WELLBY, welfare, health policy, Australia
    JEL: I31 I38 A11
    Date: 2022–05
  21. By: Federico, Salvatore (Center for Mathematical Economics, Bielefeld University); Ferrari, Giorgio (Center for Mathematical Economics, Bielefeld University); Torrente, Maria-Laura (Center for Mathematical Economics, Bielefeld University)
    Abstract: We propose and solve an optimal vaccination problem within a deterministic compart-mental model of SIRS type: the immunized population can become susceptible again, e.g. because of a not complete immunization power of the vaccine. A social planner thus aims at reducing the number of susceptible individuals via a vaccination campaign, while minimizing the social and economic costs related to the infectious disease. As a theoretical contribution, we provide a technical non-smooth verification theorem, guaranteeing that a semiconcave viscosity solution to the Hamilton-Jacobi-Bellman equation identifies with the minimal cost function, provided that the colosed-loop equation admits a solution. Coditions under which the closed-loop equation is well-posed are then derived by borrowing results from the theory of Regular Lagrangian Flows. From the applied point of view, we provide a numerical implementation of the model in a case study with quadrativ instantaneous costs. Amongst other conclusions, we observe that in the long-run the optimal vaccination policy is able to keep the percentage of infected to zero, at least when the natural reproduction number and the reinfection rate are small.
    Keywords: SIRS model, optimal control, viscosity soltuion, nonsmooth verification theorem: epidemic, optimal vaccination
    Date: 2022–06–08

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