IDEAS home Printed from https://ideas.repec.org/a/inm/ormnsc/v71y2025i3p2714-2732.html
   My bibliography  Save this article

Vaccine Progress, Stock Prices, and the Value of Ending the Pandemic

Author

Listed:
  • Viral V. Acharya

    (Stern School of Business, NBER, and CEPR, New York University, New York, New York 10012)

  • Timothy Johnson

    (University of Illinois at Urbana-Champaign, Champaign, Illinois 61820)

  • Suresh Sundaresan

    (Graduate School of Business, Columbia University, New York, New York 10027)

  • Steven Zheng

    (Graduate School of Business, Columbia University, New York, New York 10027)

Abstract

One measure of the ex ante cost of disasters is the welfare gain from shortening their expected duration. We introduce a stochastic clock into a standard disaster model that summarizes information about progress (positive or negative) toward disaster resolution. We show that the stock market response to duration news is essentially a sufficient statistic to identify the welfare gain to interventions that alter the state. Using information on clinical trial progress during 2020, we build contemporaneous forecasts of the time to vaccine deployment, which provide a measure of the anticipated length of the COVID-19 pandemic. The model can thus be calibrated from market reactions to vaccine news, which we estimate. The estimates imply that ending the pandemic would have been worth from 5% to 15% of total wealth as the expected duration varied in this period.

Suggested Citation

  • Viral V. Acharya & Timothy Johnson & Suresh Sundaresan & Steven Zheng, 2025. "Vaccine Progress, Stock Prices, and the Value of Ending the Pandemic," Management Science, INFORMS, vol. 71(3), pages 2714-2732, March.
    • Handle: RePEc:inm:ormnsc:v:71:y:2025:i:3:p:2714-2732
    DOI: 10.1287/mnsc.2023.00863
    as

    Download full text from publisher

    File URL: http://dx.doi.org/10.1287/mnsc.2023.00863
    Download Restriction: no
    File URL: https://libkey.io/10.1287/mnsc.2023.00863?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:inm:ormnsc:v:71:y:2025:i:3:p:2714-2732. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Asher (email available below). General contact details of provider: https://edirc.repec.org/data/inforea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.