An Economic Framework for Vaccine Prioritization

Abstract

We propose an economic framework for determining priority rules for allocating a scarce supply of vaccines that gradually become available during a public health crisis, such as the COVID-19 pandemic. Agents differ in observable and unobservable characteristics, and the designer maximizes a social objective function over all feasible mechanisms accounting for those characteristics, as well as agents' endogenous behavior in the face of the pandemic. The framework emphasizes the role of externalities and incorporates equity as well as efficiency concerns. Our results provide an economic justification for providing the vaccines immediately and for free to some groups of agents, while at the same time showing that a carefully constructed pricing mechanism can improve outcomes by screening for individuals with the highest private and social benefits of receiving the vaccine.