This can be modeled in the form of a kinked ‘near’ Neoclassical demand curve as depicted below. Caplan hypothesized that in many cases, the cost of holding irrational beliefs can be low or near zero and people make tradeoffs with regard to the level of rationality they consume.
(Figure 2)
Below Pa, people are willing to make tradeoffs between price and the ‘amount’ of irrationality they consume. It might then follow that if members of society are opposed to genetically engineered foods, they may be willing to pay up to Pa to avoid foods with GMO ingredients.
Implications for Combating Vaccine Hesitancy
So if the cost of holding antivax views (we can think of costs in terms of perceived risk of serious illness, loss of work, risk of quarantine, and other opportunity costs associated with not getting vaccinated) is below some level Pa, then one may be willing to make tradeoffs with regard to the level of irrationality they want to consume (we can think of the level of consumption as level of vaccine hesitancy or probability of getting vaccinated). This is represented by the portion Pa - Qa of Caplan’s near neoclassical demand curve representing rational irrationality.
Murphy (2016) extends Caplan’s model of rational irrationality to include applications where demand for irrationality occurs at prices greater than zero. In his paper he applies this theory to things like willingness to pay for ‘fair trade goods’ and vaccine hesitancy.
For example, he calculates the willingness to pay (WTP) to avoid childhood vaccinations from the parent’s perspective as follows:
WTP = WTP to avoid 1 yr sickness × premium for child × increase in probability of 1yr of sickness
He looks at vaccines for pertussis, invasive pneumococcal disease, and varicella and based on certain assumptions calculates the WTP.
“Using the median assumption that parents value the statistical life of their children 50% more than they value their own lives, the cost implicit in not vaccinating for these three diseases is US$8,420. As pointed out earlier, as many as ten percent of families exhibit this willingness-to-pay—and they do so repeatedly should they have more than one child. Under the influence of retracted evidence, thousands of parents retreat to the naturalistic fallacy, rejecting modern medicine they deem to be artificial.”
How might we apply this to combating vaccine hesitancy related to COVID? For instance, if these parents were offered more than their WTP to avoid vaccination then they may be willing to get their children vaccinated for the three conditions mentioned above. But what is the WTP to avoid COVID vaccination? $8000 is really high on an individual basis, and given the resistance and hesitancy we have seen to this point I would not expect a very low price point among the most staunch resistors. This may explain why some have concluded that offering lottery tickets to induce vaccinations may not have been as impactful as hoped:
“Our results suggest that state-based lotteries are of limited value in increasing vaccine uptake. Therefore, the resources devoted to vaccine lotteries may be more successfully invested in programs that target underlying reasons for vaccine hesitancy and low vaccine uptake”
The hope of the lottery was based on the idea that people tend to either overestimate or completely ignore low probability events. From a behavioral economic perspective we were hoping that those that were ignoring the risk of COVID might overestimate their chances of winning the lottery and be induced to get vaccinated. Apparently the expected values of the lottery did not exceed WTP in the case of COVID vaccination. There has been some recent interest in offering direct payments to people to get vaccinated. For instance the idea of paying up to $100 or even $1000 has been floated in the last year.
Some have pushed back on this. Recently the Biden administration has apparently endorsed $100 payments.
Depending on an individual's relative WTP, paying folks to be vaccinated may or may not be promising. If social harassment costs (based on my framework) are an important factor, then this could also impact the optimal WTP to target with such an outreach.
We also have to recognize the role of externalities. While there are negative externalities associated with not getting vaccinated, the positive externalities are great. For instance, if we were doing a WTP calculation to encourage vaccination, we should add some premium to that payment to account for positive externalities associated with getting vaccinated to justify the costs and increase the effectiveness of the incentive. It is an important question if the WTP for the vaccine hesitant on average is so large that this becomes prohibitively expensive.
Alternatively, targeting WTP does not have to be shouldered by government. Private employers can also offer similar incentives to get vaccinated either in the form of direct payments or penalties.
But it is hard to say if these sorts of WTP calculations would be useful for targeting 'the right' payment to incentivize vaccination if that is even something we should be doing, or if it is cost effective especially given the heterogeneity of preferences and attitudes toward risk in the population. We would need to know more. But the concept itself is probably most useful as a way to think about and quantify the level of resistance and think of what kinds of communication strategies and nudges would work best to increase vaccinations. What things could we do to reduce WTP or increase the opportunity costs of refusing the vaccine. More below.
Other Approaches
In 'Finding a vaccine for misinformation' (Vaidyanathan, 2020) authors address the challenges of misinformation as it relates to vaccine hesitancy and leverage some of the same behavioral economic frameworks.
They go on to explain that our worldview (pre-existing internal stories based on our our mental tapestry of culture, knowledge, beliefs, and life experiences) determines which gist is stored and resonates (and impacts our resistance to updating our priors with new evidence).
Part of their strategy for dealing with this is 'inoculating' consumers through gamification so that they are less susceptible to misinformation.
"Introne believes that he can use this approach to target the weakest links in false narratives and bring people closer to changing their minds. He says that if he can deliver information that doesn’t conflict with a person’s belief state but still brings them around to a more accurate point of view, “then I’ve got a pretty powerful thing.”
In the rational irrationality and social harassment frameworks above, by circumventing or inoculating against misinformation and getting out in front of it you can combat hesitancy or dampen the the extent to which adopting worldview v* lowers utility. Similarly, if we can deliver information in a way to get people to adopt v* without lowering utility, that would be a very impactful communication strategy.
BE works has applied behavioral economics to understanding and responding to vaccine hesitancy. They identified four cognitive factors driving hesitancy including one factor related to valuing personal beliefs over evidence (which sounds a lot like the rational irrationality framework we have been discussing here). (See “COVID-19 Vaccine Hesitancy: A Behavioral Lens on a Critical Problem” ) They followed up with a report and recommendations on combating hesitancy based on these findings (BEACON: A Strategic Framework for Overcoming Vaccine Hesitancy). These reports and more are available from the BE Works website (https://beworks.com/covid-19/ )
One of the strategies highlighted in this work consistent with the rational irrationality and social harassment frameworks laid out above includes leveraging social capital:
"Communications aimed at sharing relevant vaccination-positive stories of people within the recipients’ peer groups, or other groups to whom an individual feels a strong social connection, could foster a positive view of vaccination and help them see it as a routine and valued step within their identified community...."
Communications from key people in a social network (i.e. figure 1 above) may accomplish this. So an outreach targeted at these people or enlisting their efforts could be an impactful way to get members to accept vaccinations without increasing related social harassment costs and lowering utility. These people might also be a way to deliver information that doesn’t conflict with a person’s belief state as discussed above (having the same impact on social harassment and utility).
Conclusion
While we may not be able to guess everyone's WTP to get vaccinated, we should diversify our approach to targeting it or equivalently raising the opportunity costs of not getting vaccinated such that P > Pa in the context of near neoclassical demand curve above. The most effective approach may be private sector initiatives such as vaccine requirements or bonus payments for getting vaccinated. There are also ways we might leverage behavioral economics and behavioral design frameworks to magnify our impact. Most of our learnings from combating misinformation and disinformation indicate that this takes more than communicating accurate information, it requires communicating with intent and influence. But in the case of vaccinations, even small wins can result in great improvements as Murphy points out in his article.
“Economic education may struggle to sway the median voter; it may only move those with roughly correct priors regarding economic questions towards a more consistent, factual worldview. On the other hand, for each and every person convinced to vaccinate their children, the world is made better off. Some may dismiss these prescriptions, but they may have far more practical effect. Convince 300 individuals that free trade is good, the chance this changes trade policy is vanishingly small. Convince 300 individuals to vaccinate their children, and society tangibly improves. When it comes to persuasion on private markets, unlike politics, every- one is the marginal decision-maker for the irrationality present in their own lives.”
Similar to the swiss cheese model of non-pharmacological interventions in absence of a vaccine, a layered approach based on several behavioral economics frameworks seems most pragmatic for dealing with vaccine hesitancy.
See also:
Consumer Perceptions of Biotechnology: The Role of Information and Social Harassment Costs
Using Social Network Analysis to Understand the Influence of Social Harassment Costs and Preferences Toward Biotechnology
Consumer Perceptions, Misinformation, and Vaccine Hesitancy
References:
Borland,Melvin V. and Robert W. Pulsinelli. Household Commodity Production and Social Harassment Costs.Southern Economic Journal. Vol. 56, No. 2 (Oct., 1989), pp. 291-301
The Myth of the Rational Voter: Why Democracies Choose Bad Policies. Bryan Caplan. Princeton University Press. 2007
Johnson, N.F., Velásquez, N., Restrepo, N.J. et al. The online competition between pro- and anti-vaccination views. Nature 582, 230–233 (2020). https://doi.org/10.1038/s41586-020-2281-1
Murphy RH. The willingness-to-pay for Caplanian irrationality. Rationality and Society. 2016;28(1):52-82. doi:10.1177/1043463115605478
News Feature: Finding a vaccine for misinformation.Gayathri Vaidyanathan. Proceedings of the National Academy of Sciences Aug 2020, 117 (32) 18902-18905; DOI: 10.1073/pnas.2013249117 https://www.pnas.org/content/117/32/18902
