« Paul Krugman: Questions of Character | Main | Which Regions Would Be Hurt Most from a Housing Slump? »

Friday, October 14, 2005

The Economic Benefits of Vaccination Programs in Poor Countries

A new study reported in The Economist provides estimates of the economic benefits of vaccination programs in poor countries.  The study includes important indirect economic benefits of vaccination in its estimates that are missing from previous studies:

A drop of pure gold, The Economist (free link): What good is vaccination? Obviously it is good for the person receiving the vaccine ... More subtly, it can be good for an entire population since, if enough of its members are vaccinated, even those who are not will receive a measure of protection. ... But in the case of many vaccines, there are non-medical benefits, too, in the form of costs avoided and the generation of income that would otherwise have been lost. ... Quantifying these more general benefits is hard. But a pair of researchers from Harvard University has just tried. David Bloom and David Canning, together with Mark Weston, an independent policy consultant, have looked at two vaccination programmes and attempted to calculate the wider benefits. Their conclusions have just been published in World Economics. Dr Bloom and Dr Canning believed that previous attempts to quantify the non-medical benefits of vaccination had ... failed to take account of recent work on the effects of health on incomes. For their study, they and Mr Weston identified how vaccination ... might increase wealth. The first benefit was that healthy children are more likely to attend school and better able to learn. The second was that healthy workers are more productive. Both of these seem fairly obvious. Two other benefits are less so... One is that good health promotes savings and investment. This is because healthy people both expect to live longer (which gives them an incentive to save) and actually do live longer (which gives them more time to save). The other is that good health—and, particularly, expectations about the good health of one's offspring—promotes the so-called demographic transition from large to small families that usually accompanies economic development. None of these factors, the researchers thought, had been properly taken account of in previous estimates of the cost-effectiveness of vaccination. To demonstrate that ... one of their ideas was correct, they turned to the Philippines. Here, a study called the Cebu Longitudinal Health and Nutrition Survey has been going on since 1983. It follows the lives of Filipina mothers and those of their children born in 1983 and 1984. ... The three researchers ... found a statistically significant difference in the language and IQ scores between otherwise comparable vaccinated and unvaccinated children. In both cases, those of the unvaccinated were lower. Since it is known from other studies that these scores are good predictors of adult income, the researchers concluded that childhood vaccination would have significant economic benefits. In order to predict those benefits, they turned to a vaccination campaign that is just beginning. The Global Alliance for Vaccines and Immunisation (GAVI) is a collaboration of governments, international organisations, vaccine-makers and charities. ... the researchers used data from previous vaccination programmes to estimate both the reduction in mortality and the improvement in the health of the living that might be expected to flow from the new GAVI programme. Then they combined these estimates with existing data about the economic effects of health improvement ... in poor countries... on future income. Using standard accounting methods ... they calculate that the new GAVI programme can be expected to generate an immediate rate of return of 12.4%, rising to 18% by the end of the programme. And that does not include any benefits that might come from the demographic transition. The dispassionate economic case for vaccination, therefore, looks at least as strong as the compassionate medical one. If the figures ... are right, it truly is an investment for the future.

Here's a link to the article (subscription) in World Economics.

    Posted by on Friday, October 14, 2005 at 12:42 AM in Economics, Health Care | Permalink  TrackBack (1)  Comments (3)


    TrackBack URL for this entry:

    Listed below are links to weblogs that reference The Economic Benefits of Vaccination Programs in Poor Countries:

    » Vaccines and Growth from Vaccines for Development

    A new paper by Bloom, Canning and Weston looks at the cost-effectiveness of vaccination programs, and the broader economic benefits of vaccination. The paper was reported in this week's Economist. Here we summarize the paper, and offers some comments. [Read More]

    Tracked on Sunday, October 16, 2005 at 12:51 PM


    Feed You can follow this conversation by subscribing to the comment feed for this post.