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

EDITORIAL

ECONOMIC EPIDEMIOLOGY: THEORY AND EVIDENCE.

EPIDEMIOLOGÍA ECONÓMICA: TEORÍA Y EVIDENCIA.

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.

ORCID ID:

Hubert Ribeiro Araceli

orcid.org/ 0000-0002-8967-484X

Balbinotto Neto Giácomo

orcid.org/0000-0001-8289-1932

*Corresponding author: Giácomo Balbinotto Neto

E-mail: giacomo.balbinotto@ufrgs.br

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.

Citation:

Hubert Ribeiro A, Balbinotto Neto G.

ECONOMIC EPIDEMIOLOGY: THEORY

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

elasticity-prevalence.

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].

ECONOMIC EPIDEMIOLOGY: THEORY AND EVIDENCE

Revista Médica Vozandes

Volumen 32, Número 2, 2021

EDITORIAL

epidemic itself and in the public health measures designed to

control it. Table 1 below summarizes the main implications of this

approach.

Table 1: Elasticity – Prevalence Values (Ep)

Ep Values Prevention demand Implications

Ep = 0

(Traditional

approach)

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

diseases.

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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