Friday, November 06, 2009

H1N1 calculation

I can't say I'm surprised about the hubbub over certain Wall Street firm receiving H1N1 vaccines. But it seems that the justification of how to distribute H1N1 vaccines is only half the story. The "highest risk" individuals are to first get the scarce vaccine-- that means those that are most likely to contract (and suffer most) from H1N1. That's only the direct cost. If we're economists, we also want to look at the indirect cost-- the lost productivity from contracting the flu. To that end, one could make the argument that maybe it was those on Wall Street that should be vaccinated first. It also could be the case that it's not those on Wall Street but another group entirely-- it doesn't matter either way. The point is that there's more to consider that just probability of catching H1N1. As it turns out, the market would cover this aspect quite nicely; willingness to pay considers foregone productivity. What we do know is that the government can't aggregate this information and create a top-down distribution strategy that replicates the market outcome. (Nor, for that matter, are they likely to be able to effectively distribute along the simpler lines of "highest risk" either.)

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