An economic look at the new malaria vaccine

Screen Shot 2019-05-30 at 5.21.49 PM

It is excellent news that a pilot program for the new malaria vaccine, RTS,S, is being rolled out in Malawi, Ghana, and Kenya. The vaccine works in combination with other malaria prevention efforts–bed nets, clearing stagnant water from homes–and might reduce fatal malaria in 1/3 of cases.

Economists such as Jeffrey Sachs have long looked at malaria as one of several health challenges that feed into the poverty trap.

Malaria is particularly frustrating because it kills almost half a million people per year, yet it is far easier and cheaper to prevent than other health scourges. Bed nets are an example of a public health “low-hanging fruit” as Banerjee and Duflo have called it, a cheap way to save lives, that is vastly underutilized. It has been quite difficult to convince rural African to use bed nets, and studies have shown that subsidizing the nets to almost free makes as little as a 5% increase in acquisition of nets. William Easterly haunted development scholars with his tales of subsidized bed nets being used for wedding veils and fishing.

Screen Shot 2019-05-30 at 5.21.31 PM

Unfortunately, development economists of public health find that the poor tend to spend their money not on cheap preventative measures, but on expensive treatment instead. When reading about the new malaria vaccine, I found myself prevented with all sorts of questions from behavioral economics:

  • Is it a problem of psychological “sunk costs”? The vaccine is supposed to be used in addition to efforts already in place. The problem, some say is precisely that bed nets are free or cheap, and that means people don’t value them. Their subsidization reduces their “sunk cost” of purchase, which is the money we spend that we can’t get back. Studies show that sunk costs make people use and value those purchases longer and follow through with the cost of ongoing maintenance, e.g. sewing up holes in the nets. With this in mind, should the vaccine be totally free to everyone, or incur some small charge?
  • The “free-rider problem”: This applies to all vaccines everywhere. If I believe everyone around me going to some effort will achieve those ends, there is little reason for me as an individual to make that effort when I will benefit regardless. Actually, my individual efforts would be a form of economically “irrational” behavior, i.e. not self-maximizing, in this sense. If everyone in my village will vaccinate their child, pay for it and deal with the fever and fussiness that temporarily follows, and I believe that will eradicate malaria in my village, then it makes sense for me as an individual to abstain from the trouble of getting the vaccine.  This line of thought is less applicable to malaria, which is highly mobile and widespread, than to more obscure infectious diseases in the U.S., however.
  • What is the “opportunity cost” for parents to vaccinate their children?: This asks what people miss out on with Option A by choosing Option B. I mentioned it in a previous post about the Niger Delta Amnesty program, which sought to provide job training for insurgents, thus lowering the cost of leaving rebel groups and increasing the cost of staying in them. The question of the opportunity cost for African parents would be, “How much am I missing out on in order to attend the vaccination clinic?” Parents could be incurring the cost of a long walk, leaving behind free childcare, missing farming time that generates income, etc. If this a concern for parents, studies in India showed that providing just a small amount of lentils to parents increased the likelihood that they would vaccinate.
  • Would these vaccines be affected by “time inconsistency” on the part of parents?: Behavioral economists teach us that we want to put off small costs today even if doing so risks big gains in the future. We care more about the present than the future essentially. The cost of getting a child vaccinated today could feel greater than the hypothetical cost of that child contracting malaria later on. To overcome this, there have to be very few obstacles to today’s vaccination and a sense of grave potential cost to contraction–which is a public awareness and education issue.

There is not much information online on the logistics of how the RTS,S vaccine is logistically being rolled out, but a key issue would be to ensure that public health care providers are reliable in their work attendance. Studies show that public workers in health have troublingly high absenteeism a the workplace. This makes them unreliable to patients who then stop coming for care, and in turn, those workers get bored and suffer even lower morale that disincentivizes work attendance.

Additionally, any innovation that would require even a slight modification in behavior requires a bit of “nudge” sometimes, for humans can be quite conservative creatures. “Nudges” are slight changes to structure or incentives that make it easier to follow a certain course of action. The best nudges are those that make that action the default one, i.e. parents who have to exert effort to not get the malaria vaccine because it is built into some other form of cheap and accessible health care.  Development folks in the West often forget this because, as Banerjee and Duflo aptly describe it, “those who live in rich countries live a life surrounded by invisible nudges”.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s