Revista Médica Vozandes
Volumen 32, Número 2, 2021
The purpose of this editorial is to highlight the importance and relevance
of a new area in Health Economics: Economic Epidemiology. We also
want to encourage further studies in this area, fostering contact between
economists and epidemiologists, as their contributions are important for a
better understanding of the evolution and dynamics of infectious diseases.
Economic epidemiology can be dened as a discipline and multidisciplinary
area that analyses the relationship between preventive behaviour and
the prevalence of diseases. It focuses on the economic causes and
epidemiological consequences of the spread of infectious diseases that
affect public health. The basic presupposition of this approach is that the
rational behaviour of individuals affects the trajectory of an infectious
disease in a population, which can bring unwanted consequences both
at the individual and collective levels. Thus, Economics uses concepts
little explored by the classical approach to infectious diseases within the
epidemiological eld [1].
Infectious diseases have a unique feature that makes them particularly
difcult to analyse: the fact that they are transmitted from person to
person. With this, individual behaviour becomes a central aspect within
Economic Epidemiology, especially given the fact that individual choices,
made about treatment and prevention, impact other individuals. In many
situations there is a discrepancy between choices considered optimal by
the individual and the collective. The impact of individual choices on others
is a widely used concept in economics, known as externality. Because
this concept is so central, the economic approach has the potential to
contribute to the understanding of how human behaviour affects infectious
diseases and what the governmental role is in controlling these diseases [2].
According to Gersovitz, M, et al., [3] two types of externalities related to infectious
diseases can be identied. The rst externality occurs with an infection from
one person to another (a cascade effect) which can be called pure infection
externality. This externality arises if an individual, when choosing their own levels
of therapeutic and preventive efforts, does not consider the costs incurred
by others who will be infected because of their infectiousness. The second
externality is that of pure prevention that arises because of the preventive
actions of an individual that can directly affect the probability that other
people will become infected, even if the preventive action does not prevent
the infection of the individual who is taking precautions. Usually, this second
externality is more focused on infectious diseases that have a disease vector.
Economic Epidemiology relies on people’s rational behaviour that seeks
to maximize individual well-being based on incentives, restrictions, and
information that reaches them. The importance given to the dynamics
of human behaviour, within an epidemic, brings new explanations for the
understanding of infectious diseases.
According to Philipson T, et al., [4], standard epidemiological models, in
general, made unreasonable predictions about the growth of contagious
diseases, such as AIDS, which is mainly transmitted through sexual
behaviour. Therefore, economics can be used to increase the predictive
1 Universidade Federal Do Rio Grande do Sul, Faculda-
de de Ciências Económicas. Porto Alegre – Brasil.
2 Universidade Federal do Rio Grande do Sul, Pro-
grama de Pós-graduação em Economia. Porto Alegre
– Brasil.
3 Instituto de Avaliações de Tecnologias em Saúde,
Porto Alegre – Brasil.
Hubert Ribeiro Araceli 0000-0002-8967-484X
Balbinotto Neto Giácomo
*Corresponding author: Giácomo Balbinotto Neto
Hubert Ribeiro Araceli 1, Balbinotto Neto Giácomo 1,2,3*
Este artículo está bajo una
licencia de Creative Com-
mons de tipo Reconocimien-
to – No comercial – Sin obras
derivadas 4.0 International.
Hubert Ribeiro A, Balbinotto Neto G.
AND EVIDENCE. Rev Med Vozandes.
2021; 32 (2): 9 - 11
Received: 05 – Sep – 2021
Accepted: 14 – Nov – 2021
Publish: 01 – Dic – 2021
Article history
Conflict of interest: The author declares no
conict of interest.
Palabras clave: Economia de la Salud, Econo-
mia Epidemiológica, Economia de Enfermedades
Infecciosas, Políticas Públicas en Salud, Vacunación,
Elasticidad de Prevalencia
Financial disclosure: The authors have no nan-
cial relationships relevant to this article to disclose.
Keywords: Health Economics. Economic Epidemio-
logy. Economics of Infectious Diseases. Public Health
Policies. Vaccination. Prevalence Elasticity.
DOI: 10.48018/rmv.v32.i2.e
Hubert Ribeiro A, et al.
Revista Médica Vozandes
Volumen 32, Número 2, 2021
Figure 1 . Economic response loop to infectious diseases
Source: Bhattacharya J, et al., [5].
The reciprocal relationship between self-protection and disease
prevalence: (1) self-protection limits the extent of the disease;
(2) lower prevalence motivates less self-protection. This recipro-
cal relationship creates a feedback effect that mitigates the
effects of self-protection on disease prevalence.
From an economic point of view, if a disease becomes
more widespread in the population, that is, more
prevalent, the demand for individual protection would
increase in response.[6] This type of behaviour can have
two implications: the growth of infectious diseases is self-
limited, as it induces preventive behaviour; and, since
the decline of a disease discourages prevention, public
efforts make it increasingly difcult to eradicate infectious
diseases, making vaccination campaigns, for example,
self-limiting.[5] According to Philipson T, et al., [6], if any
campaign is successful, the prevalence of the disease
decreases and, consequently, the population decreases
its demand for self-protection. This feedback only occurs
if people respond to the prevalence. Thus, we see the
importance of determining the parameter regarding
The sensitivity to prevalence is called the elasticity-
prevalence of private demand for disease prevention
(elasticity-prevalence). Many epidemiological models
do not consider that the demand for protection reacts
to the prevalence of the disease, and with this, they
end up assuming, even implicitly, that the prevalence-
elasticity is equal to zero. [5] If the prevalence elasticity
is low, zero, or close to zero, people will demand little
prevention, resulting in higher future prevalence. On the
contrary, if it is high, for example, greater than zero, then
a larger amount will be required for prevention. Thus,
there will be a low future prevalence. This demand for
prevention alters the disease prevalence rate.[7]
The elasticity-prevalence serves as a basis for understanding
the rational and strategic behaviour of individuals in relation
to infectious diseases. When the prevalence elasticity
is greater than zero, the governmental role differs from
when it is low. The importance of this concept lies in the
way the government uses it to formulate the magnitude
of public policies, that is, who they should reach, for how
long and the form of incentive used, such as opting for a
subsidy on vaccination or ways to bring information and,
consequently, education to people. Epidemics create
incentives that play a key role in the occurrence of the
and explanatory power of such models by adding the
assumption of rational behaviour. The main criticism of
conventional epidemiological models is that they failed
to consider the importance of incentives in shaping
private responses, both in relation to infectious diseases
and in relation to programs that seek to control them.
The reason for this, for example regarding AIDS, was the
failure to recognize that the increase in the prevalence
of a disease is (with certain caveats) the equivalent of
an increase in the price in the markets of goods and
services, which creates the risk of contracting the disease,
inducing a behavioural response that would limit the
further spread of it. With this, it can be understood that
the study of contagious diseases assumes that the market
for activities that create the risk of contracting infectious
diseases (such as being in touch with an infected person)
is like other markets studied by Economics [4].
The Economic approach seeks to examine the public and
private responses regarding contagious diseases, focusing
on human behaviour responses regarding changes in
incentives. This means treating individual choices as being
a rational decision in the sense that individuals respond
to incentives, in this case, the prevalence of the disease.
In addition, Economic Epidemiology can be used to
predict and assess the effects of public policies regarding
subsidies for medical research, vaccination, population
education and subsidized distribution of medicines and
tests for certain diseases.[4]
The Economic analysis takes as its starting point the
maximizing behaviour of the individual. However, this does
not mean that the social aspect is not relevant, since
infectious diseases arouse self-protection not only because
of their severity, but also because of their growth in society
and their spreading pattern. Responsiveness or sensitivity
to something is referred to in Economics as elasticity, which
is dened as the percentage change in a given variable,
given a percentage change in another. In this way, there
would be a reciprocal relationship between self-protection
and the prevalence of the disease, creating a response
loop. Understanding this relationship helps identify these
periods during an epidemic and the subsequent response
that individuals may have to the disease. [5]
This hypothesis is illustrated in Figure 1.
This approach differs from the traditional epidemiological
approach, where greater protection leads to less disease
growth, ending the relationship without considering that it
would function as a cycle and, therefore, does not consider
the behavioural response of individuals that creates this
response loop to the prevalence of the disease. Traditional
epidemiological analysis certainly discusses how various
patterns of behaviour affect disease occurrence, but
it does not analyse the implications of how behaviour
changes in response to new incentives created by the
growth of a disease, nor does it analyse the effects of these
changes on measures of public health [5].
Revista Médica Vozandes
Volumen 32, Número 2, 2021
epidemic itself and in the public health measures designed to
control it. Table 1 below summarizes the main implications of this
Table 1: Elasticity – Prevalence Values (Ep)
Ep Values Prevention demand Implications
Ep = 0
Little prevention More future prevalence
Ep near 0 Little prevention More future prevalence
Low Ep Little Prevention More future prevalence
High Ep More Prevention Low future prevalence
Ep much higher
than 0
More prevention Low future prevalence
Ep > 1 More prevention Low future prevalence
(Economic Approach) (Ex: demand for vaccine)
Source: Authors’ own elaboration.
Elasticity-prevalence is considered a major contribution of
economic epidemiology, for the understanding of the spread
of infectious diseases.
Government measures aims to increase the demand for
vaccination among the population, through price subsidies and
other similar policies. Programs that seek to stimulate this demand
are usually motivated by the low supply of vaccines, and the
belief that demands for vaccine is price elastic. However, if
demand for vaccine is elastic (sensitive) to disease prevalence,
it will limit price elasticity. According to Philipson T, et al. [8], a price
increase will lead to an increase in prevalence and, therefore,
an indirect increase in demand for vaccines. In this way, the
negative effect caused by the price will be compensated. If the
demand for vaccine is highly elastic (sensitive) to prevalence,
the demand will be highly inelastic (not sensitive) to price,
making vaccine price a secondary barrier to the rate of increase
in vaccinations. With this, the elasticity-prevalence is of foremost
importance, since it alters the calculations of the impact of price
subsidies aimed at stimulating demand.
The limitations that demand imposes on subsidies must always be
considered, proposing a reassessment of such subsidies. When
demand is elastic to prevalence, it has important implications
for the timing of implementing public health programs, as public
subsidies that encourage self-protective behaviour compete
with transmissive behaviour, that is, if the public subsidy is applied
too late, the private disincentive caused by prevalence has
already modied behaviour. Therefore, a more
careful analysis of the incentives that lead to the
occurrence of vaccine-preventable diseases
is needed, and the effect that public measures
have on the control of infectious diseases, even
those not preventable by vaccine. [9]
This brief editorial aimed to show how infectious
diseases can be evaluated from the perspective
of Economics. The Economic approach to
epidemiology has not sought to diminish the
importance of other approaches but seeks
to highlight recent theoretical and empirical
contributions that can be made by Economics,
and which have not yet received due attention
from many professionals mainly linked to Public
Health and Economic policymakers in this area.
The editorial sought to illustrate and indicate the
importance of information, incentives, restrictions,
and direct and indirect costs related to infectious
diseases. All these points are critical for evaluating
the real efciency of public policies for infectious
With the advance of the new corona virus
pandemic and other infectious diseases
plaguing our region and countries, this area is
gaining notoriety within the community of health
economists and policymakers. Several efforts
are being made to understand the behaviour
of different populations in the face of the
pandemic and what can be done to change
individual incentives and restrictions to promote
an improvement in public health. Understanding
what drives people to take decisions regarding
specic diseases opens a range of options
and possibilities to contain the spread and the
worsening of infectious diseases, in addition to
help ght new epidemics.
Economic Epidemiology, its models, implications,
and empirical evidence are still in the initial phase
of its development, not having all its aspects fully
explored. Thus, we hope that this editorial will
encourage both health professionals, economists,
epidemiologist, pharmacists and other medical
researchers to carry out research in the area
and public policymakers to use this original and
novel approach as tool in the formulation and
evaluation of public policies in health and in
epidemiology in particular.
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