Misperceiving the Mortality Reduction Benefits of COVID-19 Vaccines

Clinical trials and post-market studies showed that COVID-19 vaccines are highly effective at reducing COVID-19 mortality, yet only about 67 percent of the US population has received two doses of the vaccines. In How Undervalued Is the COVID-19 Vaccine? Evidence from Discrete Choice Experiments and VSL Benchmarks (NBER Working Paper 30118), Patrick Carlin, Brian Dixon, Kosali Simon, Ryan Sullivan, and Coady Wing suggest that survey respondents substantially undervalue the vaccines’ benefits.

The researchers conducted a survey on the Microsoft news website between February and March 2021, when vaccines were just becoming widely available. Those who clicked to participate in the survey were presented with two questions. The first asked whether the participant would be willing to pay a price to receive a COVID-19 vaccine four months early, where the price was randomly assigned to be $50, $100, $200, $500, or $1,000. The second asked whether the participant would agree to accept a cash payment for delaying the second dose of the vaccine by three months. The randomly assigned payment amounts were $5, $10, $50, $100, or $200.

In a survey, Americans valued a first dose of a COVID-19 vaccine at about 2 percent and a second dose at about 32 percent of the amount implied by value of statistical life calculations.

Using the Department of Health and Human Services’ $11.4 million benchmark for the value of a statistical life (VSL) and estimates of the COVID-19 vaccines’ mortality reduction rate, the researchers calculate that a typical respondent should be willing to pay $2,761 to receive the first vaccine four months early and should require a $619 payment to agree to delay the second dose. In contrast, participants’ choices in the experiment suggest that the median person was willing to pay only $50 for the first dose, and willing to accept only $200 to delay the second dose. The researchers posit that these results are due to misperceptions of the vaccines’ benefits. Respondents appear to underestimate the benefits of the vaccine.

The study calibrates these perceptual errors by dividing the reported willingness to pay for altering the timing of vaccination by the payment that would be implied by VSL calculation. They find that respondents value the first dose at about 2 percent of this value, and the second dose at about 32 percent.

In the absence of perceptual errors, people should be less price sensitive to the timing of the first vaccine than the second since the reduction in mortality from receiving the first dose early is greater than the increase in mortality from delaying the second. The survey results suggest just the opposite. A 10 percent increase in price reduced reported demand for early take-up of the first shot by about 8 percent, while increasing the cash payment offer for delaying the second shot reduced demand by only 2.6 percent.

The researchers find less price sensitivity in the willingness to pay for an early first dose among older respondents and those who are vaccine hesitant. They do not find any impact of the local severity of COVID-19. Counterintuitively, a higher cash payment reduces the willingness to delay the second dose for those who are vaccine hesitant. It is also more effective at inducing people to delay a second dose when COVID-19 is more locally severe.

—Whitney Zhang