Using economics to boost vaccinations

The medical science is clear that vaccinations are our shield against COVID-19 and our ticket towards safely reopening our economy and borders, and reuniting with the people and lives we miss.

There are lots of ideas and opinions being circulated at the moment on how to overcome vaccine hesitancy and boost the uptake of vaccinations among the Australian population.

Economists can contribute to this policy issue by looking carefully at the available research, and combining this with our understanding of incentives, principles of good policymaking, and the psychological factors that shape people's decision-making and behaviours.

There are lots of factors to consider here, including the ethical and moral factors surrounding mandates; identifying the role models and social institutions that people trust in the most as a source of credible information; and appreciating that people's capacity to digest new information and make big decisions might be slowed down under the stress and cognitive overload that they're currently living through.

How can we overcome vaccine hesitancy? A podcast discussion

Recently I joined the host of Think: Business Futures Toby Hemmings, along with experts in marketing from the UTS Business School, Associate Professor Paul Burke and Dr Ofer Mintz, to discuss the timely and thought-provoking question "how can we overcome vaccine hesitancy?"

Here's the link to our podcast conversation: Combating Vaccine Hesitancy

What measures should Australian governments adopt to promote demand for vaccinations? A survey of economists

A similar question was posed in the recent National Economic Poll, run by the Economic Society of Australia in partnership with The Conversation.

Panellists were asked “once supply is no longer a constraint, what measures should Australian governments adopt to promote demand for vaccinations?” Possible options on the menu included: cash incentives, vaccination passports for higher risk settings, mandatory vaccination for higher risk occupations, national advertising campaigns, or no additional measures.?

I've shared my response below, drawing upon the relevant evidence-based research:

Behavioural economics shows us that the design of the decision-making environment (what we call "choice architecture") can steer people towards choices that would be best for society overall (in this case, having a vaccination), without necessarily resorting to mandates or overt enticements like cash incentives.

Lotteries and cash incentives have appeal, but can come with potential costs. For a start, an element of good public policy is that you shouldn't be paying people for something they were planning to do anyway.

Secondly, lotteries and cash incentives are a popular feature of US culture, but it's not clear that this resonates well in Australian culture. Unlike in the US, we don't pay people for their blood or organ donations. Instead, we have nurtured a culture where such acts are done out of goodwill, altruism, moral duty and other intrinsic values. There is a risk that attaching a financial payoff to a vaccination will distort this sense of intrinsic value, and potentially deter this innately-motivated cohort.

Activating intrinsic motivation is important for the long-term sustainability of a vaccination program: cash rewards will condition people to keep expecting a payment each time we need to roll out booster shots.

In any case, there is weak evidence that financial incentives will change the minds of people who are vaccine hesitant or resistant. Research by the Melbourne Institute found that, at most, 16% of Australians who were currently unwilling or unsure about getting vaccinated could be swayed by a cash payment.

The limited capacity for lottery incentives to successfully change people's vaccination behaviour was born out in the US state of Ohio, where the offer of a $1 million in prize money did not end up making a difference to vaccination rates. The notion of the government offering a lottery reward is also precariously linked to the issue of gambling, and could be considered insensitive to the harm and suffering that gambling causes many Australian households.

Vaccination passports could conceivably work as an incentive as well as an information device, in terms of helpfully signalling who is vaccinated or not. But the Melbourne Institute's research also found that placing social restrictions on non-vaccinated people (such as banning attendance at large events and travel) would still not be enough to sway 56% of those who were unwilling or unsure about getting vaccinated.

There is also an equity issue here. Vaccination passports can't come into effect until all members of the community have been offered their opportunity to be fully vaccinated, otherwise we are unfairly allowing freedoms to some while denying them to others.

Nevertheless, vaccination passports could have their strongest impact by setting the "social norm". That is, the default behaviour that is expected for a well-functioning society. This might incentivise people to shift their behaviour over time, once they see this as the norm. The No Jab, No Play vaccination scheme for children is an example of a successful vaccination program that has helped set childhood vaccinations as the norm.

Mandatory vaccinations for high risk occupations is an important factor for consideration, but my own assessment is that mandates should not be used simply for the purpose of boosting the vaccination rate. If mandates are enacted, it should be for genuine health and safety reasons that are specific for the occupation, irrespective of where we are up to in vaccination rates. For example, there may be a case for mandates as the way to promote the safety of customers and clients interacting with workers, and to support all workers' right to a safe working environment .

National advertising campaigns have the potential to activate intrinsic motivations, such as a patriotic spirit. However, this government's track record on advertising campaigns is not convincing (especially after the tacos and milkshakes debacle). Outsourcing the advertising mission to community groups – who have greater capacity to tailor the messaging to their particular demographic, cultural, industry or geographical cohort – is likely be more effective.

Research shows that the interventions that have been found to be successful in shifting people's intrinsic attitudes and behaviours are those where the message is delivered by someone that they genuinely trust, admire, respect and relate to. Beyond the broad messaging from high level leaders, a tailored advertising approach could make better use of the power of local role models, ambassadors and leaders of local communities, and social peer groups to convey the vaccination message in a more meaningful way across different cohorts of society.

Behavioural economics tells us that, to nudge people's choices, policy needs to be designed in a way that makes it easier to opt-in, and more onerous to opt-out. Once a sufficient supply of vaccines is secured, vaccination take-up can be improved by making "opting in" the easiest choice and the default. This means, for example, that everyone is automatically registered for a vaccination, saving people the time and effort of chasing information. Setting vaccinations as the default might also entail automatically giving workers a day of leave to get their vaccination, without requiring them to go out of their way to request this.

Lastly, while we keep hearing that "vaccinations are our ticket out of the pandemic", we must not lose sight of the other critical investments that are needed to contain the spread of the virus as Australia looks to reopen to a world while the virus is still running rampant: namely, purpose-built quarantine facilities. To offer analogy: if your kitchen tap is dripping, you don't just let it keep dripping and mop up the puddles – the more efficient solution is go to the source of the leakage and tighten up the tap. While vaccinations are equivalent to stemming the spread of the puddles and the severity of the water damage, building dedicated quarantine facilities would tighten up the source of the water leakage upstream.

Full responses from all panellists can be read on The Conversation website: Top economists in no rush to offer cash incentives for?vaccination