The Ex-Ante Moral Hazard Effects Of Covid-19 Vaccines
General Information
Title
The Ex-Ante Moral Hazard Effects Of Covid-19 Vaccines
Author
Virat Agrawal, Neeraj Sood, Christopher M. Whaley
Publication Type
Working paper
Outlet
NBER Working Paper Series
Year
2022
Abstract
A long-standing economic question is how protection against harm from insurance or other harm
reducing interventions leads to potentially offsetting behavior changes (ex-ante moral hazard).
Immunization is a type of insurance, as individuals incur an upfront cost when they get
vaccinated, but it protects individuals if they are exposed to a vaccine preventable disease. In this
study, we empirically evaluate the ex-ante moral hazard effects of COVID-19 vaccines. First,
exploiting the discontinuity in vaccination rates at age 65 due to early eligibility of older
population, we compared vaccination rates and risk mitigation behavior between those just above
and just below 65 years of age. We find no evidence of decrease in risk mitigating behavior
among the 65 years old and older population. Second, leveraging state-level variation in the
timing of when people in different age groups became eligible for vaccination, we estimate that
COVID-19 vaccination has no effect on risk mitigating behaviors in adult population. Our
findings imply minimal moral hazard effects of COVID-19 vaccines in the short-term.