A few weeks ago, I blogged about the Hamilton health authority's proposal of how to figure out who gets scare flu vaccines in the event of a pandemic. Now, the Canadian Olympic Committee's chief medical officer is suggesting that Olympic athletes get first dibs on flu vaccines in the event of a pandemic (hat tip to ECalgary). He notes athletes are a high-risk group and that Canadians would be sad if their Olympic hockey team caught swine flu.
Personally, I'm not convinced his argument that the positive externalities for Olympians getting vaccinated is that strong. I tend to agree with the Hamilton health authority that emergency workers should get dibs over athletes. But I'm not convinced the health authority's solution is the right one.
Why not hold a lottery for flu vaccines, and then allow people to trade or sell their vaccines as they wish? It ensures the rules are equal for everyone, and trading will allow for people who don't put a high value on the vaccine to transfer it to someone who does.
Thursday, October 15
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There is no positive externality to Canadian athletes getting a flu shot since Olympic medals have a value of zero to society.
ReplyDeleteWell, J. Fugle, you might think not, but... http://www.knowingandmaking.com/2008/08/economic-efficiency-of-sport.html
ReplyDeleteRe: the health authority's criteria, one of the key goals is to vaccinate people who are likely to be highly-connected nodes in the swine flu network, i.e. those who may pass it to others. The economic interpretation is to consider the vaccine in this case not as a consumption but an investment good, and direct it to where it makes the highest return.
On the lottery idea: on pure equity grounds, a straight auction is superior to a lottery, because the funds raised could be directed straight to poor people instead of to those who happened to win the lottery. However the public psychology of the auction approach is probably weaker. First, it more obviously reduces the transaction to a financial one; maybe because the auction is conducted in public instead of as a series of private transactions. Second, because the money will be perceived as going to "the government" instead of to real people.
Third, because it will actually be economically efficient. While this seems like it would a good thing, many people will feel that efficiency makes the process somehow soulless and cynical. The fact that, under a lottery, some middle-class people would end up holding onto their vaccine instead of selling it (endowment effect, anyone?) and thus some lucky person would be saved when they aren't willing to pay for it, may make the whole process somehow more legitimate in the public's eyes. Sometimes a bit less rationality is what people relate to.
I don't think an auction is superior to a lottery in terms of equity and efficiency.
ReplyDeleteWe should be trying to allocate flu vaccine to those who want it most. The problem with an auction is that you can place a high value on the vaccine but not have the means to pay for it. If I value a vaccine at $10,000 but the bank will only give me $1,000, then in an auction it'd appear I'd only value the vaccine at $1,000 (assuming it's a second-price auction). But if I won the vaccine in a lottery, I wouldn't sell it for $1,001, even though an auction result would suggest I would.
Granted, in an auction the government could spread revenues more equitably, whereas in the lottery case all revenues from flu vaccine sales are concentrated to winners, so there are bigger winners and bigger losers. But I still prefer the lottery idea because it gives poor people who place a high value on the vaccine but with little ability to pay an equal playing field to start with.
Economics aside, I'm under the impression that our government has purchased enough vaccines for every Canadian.
ReplyDeleteI think the primary problem with the lottery would be the massive transaction costs involved. It would be a logistical nightmare.
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