skip to content

Faculty of Economics

Journal Cover

Toxvaerd, F.M.O. and Rowthorn, R.

On the Management of Population Immunity

Journal of Economic Theory

Vol. 204 (2022)

Abstract: This paper considers a susceptible-infected-recovered type model of infectious diseases, such as COVID-19 or swine flu, in which costly treatment or vaccination confers immunity on recovered individuals. Once immune, individuals indirectly protect the remaining susceptibles, who benefit from a measure of herd immunity. Treatment and vaccination directly induce such herd immunity, which builds up over time. Optimal treatment is shown to involve intervention at early stages of the epidemic, while optimal vaccination may defer intervention to intermediate stages. Thus, while treatment and vaccination have superficial similarities, their effects and desirability at different stages of the epidemic are different. Equilibrium vaccination is qualitatively similar to socially optimal vaccination, while equilibrium treatment differs in nature from socially optimal treatment. The optimal policies are compared to traditional non-economic public health interventions which rely on herd immunity thresholds.

Keywords: Economic epidemiology, externalities, herd immunity, treatment, vaccination

JEL Codes: C73, I18

Author links: Flavio Toxvaerd  

Publisher's Link: https://doi.org/10.1016/j.jet.2022.105501



Cambridge Working Paper in Economics Version of Paper: On the Management of Population Immunity, Toxvaerd, F.M.O. and Rowthorn, R., (2020)

Papers and Publications



Recent Publications


Elliott, M., Golub, B. and Leduc, M. V. Supply Network Formation and Fragility American Economic Review [2022]

Bhattacharya, D. and Shvets, J. Inferring Trade-Offs in University Admissions: Evidence from Cambridge Journal of Political Economy, accepted [2024]

Bhattacharya, D. and Komarova, T. Incorporating Social Welfare in Program-Evaluation and Treatment Choice Review of Economics and Statistics, accepted [2024]

Ritz, R. Does Competition Increase Pass-Through? Rand Journal of Economics [2024]