斯坦福卫生经济学教材（Health Economics）杰伊·巴塔查里亚《健康经济学》课程教学资源（PPT课件，英文版）Chapter 20 THE ECONOMICS OF HEALTH EXTERNALITIES

CHAPTER 20 THE ECONOMICS OF HEALTH EXTERNALITIES

CHAPTER 20 THE ECONOMICS OF HEALTH EXTERNALITIES

Health is contagious Unlike other factors that affect economic wellbeing(e.g.height or appearance)your health is determined by the health of those around you Ex:Hope your friends got their flu shots! Many economic externalities in health Both positive and negative ones Bhattacharya,Hyde and Tu-HealthEconomics

Bhattacharya, Hyde and Tu – Health Economics Health is contagious  Unlike other factors that affect economic wellbeing (e.g. height or appearance) your health is determined by the health of those around you  Ex: Hope your friends got their flu shots!  Many economic externalities in health  Both positive and negative ones

Externalities can justify government intervention Without externalities,economic theory says that markets reach an efficient outcome Taxes subsidies only distort the efficient outcome With externalities,government responses may help the market reach a socially desirable state Ex:Public health efforts,like flu vaccination campaigns or quarantines to combat deadly diseases like Ebola virus Bhattacharya,Hyde and Tu-HealthEconomics

Bhattacharya, Hyde and Tu – Health Economics Externalities can justify government intervention  Without externalities, economic theory says that markets reach an efficient outcome  Taxes & subsidies only distort the efficient outcome  With externalities, government responses may help the market reach a socially desirable state  Ex: Public health efforts, like flu vaccination campaigns or quarantines to combat deadly diseases like Ebola virus

Externalities in health Externality:any positive or negative effect that a market transaction imposes on a third party (i.e. someone other than the buyer or seller). Many externalities in the world of health: second-hand smoke catching infectious disease from your neighbors the motivational benefits of living among active people the taxes paid to the government to care for sick people Bhattacharya,Hyde and Tu-HealthEconomics

Bhattacharya, Hyde and Tu – Health Economics Externalities in health  Externality: any positive or negative effect that a market transaction imposes on a third party (i.e. someone other than the buyer or seller).  Many externalities in the world of health:  second-hand smoke  catching infectious disease from your neighbors  the motivational benefits of living among active people  the taxes paid to the government to care for sick people

Private welfare vs.social welfare Important distinction between private and social welfare Private welfare is the utility level isolated to one individual within a society Actions that increase or decrease this quantity are said to have private benefits or private costs. Social welfare is the summed utility levels of all individuals within a society Actions that increase or decrease this quantity are said to have social benefits or social costs. Bhattacharya,Hyde and Tu-HealthEconomics

Bhattacharya, Hyde and Tu – Health Economics Private welfare vs. social welfare  Important distinction between private and social welfare  Private welfare is the utility level isolated to one individual within a society  Actions that increase or decrease this quantity are said to have private benefits or private costs.  Social welfare is the summed utility levels of all individuals within a society  Actions that increase or decrease this quantity are said to have social benefits or social costs

Herd immunity Each vaccination protects not only the vaccine- recipient but also neighbors as well Even unvaccinated people benefit when their neighbors,friends,coworkers,and family become immune through vaccination Known as herd immunity Herd immunity is a classic positive externality: the social gain from each vaccinationis greater than the private gain from that vaccination. Bhattacharya,Hyde and Tu-HealthEconomics

Bhattacharya, Hyde and Tu – Health Economics Herd immunity  Each vaccination protects not only the vaccine￾recipient but also neighbors as well  Even unvaccinated people benefit when their neighbors, friends, coworkers, and family become immune through vaccination  Known as herd immunity  Herd immunity is a classic positive externality: the social gain from each vaccination is greater than the private gain from that vaccination

Herd immunity When deciding whether to get vaccinated, people balance the private gains from vaccination-immunity from the disease- against the private costs But a person considering vaccination ignores the social benefits of herd immunity Since social benefits>private benefits,a private market produces fewer vaccinations than socially optimal Bhattacharya,Hyde and Tu-HealthEconomics

Bhattacharya, Hyde and Tu – Health Economics Herd immunity  When deciding whether to get vaccinated, people balance the private gains from vaccination – immunity from the disease – against the private costs  But a person considering vaccination ignores the social benefits of herd immunity  Since social benefits > private benefits, a private market produces fewer vaccinations than socially optimal

The market for flu vaccinations Private demand curve D reflects the private decisions of people in the market about whether they want to vaccinate at price P These decisions reflect only private costs and benefits and not social costs and benefits Herd immunity benefits are ignored Bhattacharya,Hyde and Tu-HealthEconomics

Bhattacharya, Hyde and Tu – Health Economics The market for flu vaccinations  Private demand curve D reflects the private decisions of people in the market about whether they want to vaccinate at price P  These decisions reflect only private costs and benefits and not social costs and benefits  Herd immunity benefits are ignored

The market for flu vaccinations Social demand curve Dsoc is greater than the private demand Curve Dpriv Captures positive B externality of herd P S immunity Dsoc Dpriv Socially efficient equilibrium higher Q than private equilibrium Bhattacharya,Hyde and Tu-HealthEconomics

Bhattacharya, Hyde and Tu – Health Economics The market for flu vaccinations  Social demand curve Dsoc is greater than the private demand curve Dpriv  Captures positive externality of herd immunity  Socially efficient equilibrium higher than private equilibrium

The market for flu vaccinations social surplus social loss Note:Size of the social loss (the area of B) depends on the price elasticity of the demand 3 S curve. Dsoc .Dpriv Q'soc Q Bhattacharya,Hyde and Tu-HealthEconomics

Bhattacharya, Hyde and Tu – Health Economics The market for flu vaccinations Note: Size of the social loss (the area of B) depends on the price elasticity of the demand curve