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Epidemic policy under uncertainty and information

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  • Martin Forster
  • Emanuela Randon

Abstract

We present a model of infectious disease control which incorporates uncertainty and information. A policy-maker possesses beliefs about the value of a key parameter - we choose the level of herd immunity in the population - and seeks the welfare-maximising level of intervention, accounting for both the public health benefit and economic cost. An approximation to the optimal rule shows that it accounts for interactions between beliefs, the policy-maker's attitude to risk, the production technology and costs, and the weights in the welfare function. We consider the role of information, in the form of expert opinion and scientific advice, in influencing the policy-maker's beliefs and the optimal policy. We assess the framework's potential for advancing the economic modelling of epidemic control.

Suggested Citation

  • Martin Forster & Emanuela Randon, 2020. "Epidemic policy under uncertainty and information," Discussion Papers 20/05, Department of Economics, University of York.
    • Handle: RePEc:yor:yorken:20/05
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    More about this item

    Keywords

    Economics; Epidemics; COVID-19;
    All these keywords.

    JEL classification:

    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • H12 - Public Economics - - Structure and Scope of Government - - - Crisis Management
    • H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health

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