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Flashcards in Economic Epidemiology Deck (7)
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1

When will people increase their demand for self protection against illness?

When the cost of carrying a disease is high.
This cost is split into epidemiological costs and excess burden costs.

2

What are epidemiological costs?

The epidemiological cost to the individual is the cost of the financial and non-financial disadvantages - e.g. lost wages and physical suffering.

3

What is the excess burden?

The excess burden is the cost of all the activities that people take in order to avoid the disease (like staying inside and forgoing going to the gym).

4

Why is it proposed that after a certain period, the epidemiological cost starts to reduce, forming a upside down curve?

As we can see, the epidemiological costs rises and then falls. This is because as the severity of the disease increases, more people suffer the direct effects of the disease. However, it gets to a point where the disease is so prevalent that people altogether stop their activities and thus, less people transmit the disease which explains the decline in epidemiological cost. The total economic costs continue to rise as people are still sacrificing utility to avoid the disease.

5

What is the prevalence elasticity of demand?

The prevalence elasticity of demand describes the changes in the demand for self-protection as the disease becomes more or less prevalent.

When the disease is less widespread, there will be less demand for self -protection which, during the early stages of disease, will promote greater numbers of transmission. The inverse is also true for a short period of time, which induces a cyclical period.

6

Why is it often so hard to completely eradicate disease?

At the start of any disease eradication programme, the prevalence of disease is high and so too is the private benefit of getting vaccinated. Thus, the herd immunity effect will also be high. But as more people get vaccinated, more people also do not derive as much private utility from vaccinations and thus the negative feedback loop effect takes dominance - this is why it is so hard for disease eradication programmes to succeed.

7

What are some methods that we can push forward to fully eradicate disease control?

We can take the Pigouvian or the Coasian methods of trying to eradicate disease.

Pigouvian involves taxing people based on their consumption which is not morally right as this means we will incur costs on the most sickly. Pigouvian subsidies may work as people are now incentivised financially to increase the social benefit (as well as private) - this is true in the case of the Nicaraguan government.

Coasian methods will involve for parties to engage in trade or agreement in allocation of property rights so that externalities are internalised, i.e. the unvaccinated being paid by the vaccinated to get vaccinated.