Measles is a serious disease. Globally, some 110,000 individuals, mostly children, died from the viral infection in 2017, a 22% increase from the year before, according to Unicef. So the regular outbreaks, also seen in Europe and the US, are causing grave public concern.
Many blame recurring outbreaks on misinformation leading some parents to the seemingly ill-judged decision not to vaccinate their children. While there is undoubtedly truth in this narrative, there are other forces at play.
There is not a vaccine around without side-effects: some are worse than others, some are misunderstood and some are grossly exaggerated through bad science. No matter, when looking through an economic lens—and we view the individual as an economic agent, who naturally weighs the benefits of vaccinations against the perceived costs—we can learn some stark lessons.
Economists are not best equipped to understand the biology of vaccines, their effectiveness or the logistical challenges around their delivery. However, economists instead possess a methodology capable of tracing the behavioural responses that make infectious diseases so difficult to kill off.
Typically, the economic problem of leaving vaccinations to individuals is one in which personal choice does not necessarily coincide with the public good.
This relates to a general concept of economists: externalities. This is where the purely self-serving individual does not necessarily consider the effects of their decisions on others. While not choosing to vaccinate oneself may be perfectly rational, when the risks of the side-effects may seem too high, such individual decisions often ignore the detrimental effects on the wider population.
For the individual, the benefit of vaccination is the near certain avoidance of the disease. A higher prevalence implies a higher risk, and therefore a higher gain from taking the precautionary action. As vaccine uptake rates increase, it will lead to a decline in the prevalence rate, implying a lower benefit to the individual in turn.
At the same time, the perceived personal risk from side-effects stays constant. For some, there comes a point where the disease prevalence rates are low enough for the believed risk of side-effects to outweigh the benefits of vaccination. And it is this trade-off between benefits and costs that makes infectious diseases near impossible to eradicate by voluntary vaccination means alone.
So is the suggestion of Matt Hancock, the secretary of state for health, of making the measles, mumps and rubella vaccination compulsory sensible? While this could be proposed by some economists, it is a blunt tool where other solutions are available. Indeed economists have more generally advocated so-called Pigouvian taxes (subsidies) to rectify the private under-provision that occurs in the case of externalities.
Thus, they seek to incentivise target groups by introducing a price of inaction. The individual refusing the vaccination is now compelled to pay a tax to reflect the magnitude of damage they are inflicting on society. The policy works as individuals seek to limit their tax liability. And with proper monitoring, the only way to circumvent taxes is to vaccinate. If, as often argued, the damage to society is considerable then taxes must be substantial.
What then are the economic conclusions?
Well, in short summary, it is that voluntary vaccinations alone are unlikely to eradicate a disease. The human responses are too complex for such a simple intervention to work, so more sophisticated measures are needed. An ignored tool is the tax instrument advocated by economists. This could and should be part of the wider toolbox of policymakers and public health authorities. Utilised taxes must then be set high enough in order to reflect the potential damage non-vaccinating individuals inflict on others and thus effectively change behaviour to the overall benefit of society.
The views and opinions expressed in this article are those of the authors and do not necessarily reflect the views of The Economist Intelligence Unit Limited (EIU) or any other member of The Economist Group. The Economist Group (including the EIU) cannot accept any responsibility or liability for reliance by any person on this article or any of the information, opinions or conclusions set out in the article.
