Working Paper: NBER ID: w30118
Authors: Patrick Carlin; Brian E. Dixon; Kosali I. Simon; Ryan Sullivan; Coady Wing
Abstract: Two discrete choice experiments conducted early in the Covid-19 vaccination campaign show that people dramatically undervalue the Covid-19 vaccine, relative to benchmarks implied by the value of a statistical life (VSL). Our first experiment found that median willingness to pay (WTP) for initial vaccination is around $50, only 2 percent of the WTP implied by standard VSL calculations. Our second experiment found the median person was willing to accept (WTA) about $200 to delay the second dose, only 32 percent of the WTA implied by standard VSL calculations. While standard economic models imply that vaccines are undervalued because of their large externalities, we interpret the finding that WTP estimates are well below the VSL benchmarks as evidence that internalities play a substantial role. This evidence that people undervalue even the private benefits of vaccination suggests that there may be a role for government beyond conventional efforts to correct externalities.
Keywords: COVID-19 vaccine; willingness to pay; value of statistical life; discrete choice experiments
JEL Codes: H0; I0; I12; I18; I28
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| behavioral biases (D91) | systematic undervaluation of vaccination benefits (J17) |
| median WTP for vaccination (I18) | undervaluation of vaccine's private benefits (H41) |
| median WTA for delaying second dose (C41) | undervaluation of vaccination benefits (J17) |
| low WTP and WTA (D69) | internalities affecting vaccine valuation (H43) |
| experimental WTP/WTA estimates (D69) | comparison with VSL benchmarks (J17) |