Peltzman and Vaccines

While I was standing in the queue to get my first dose of Covid vaccine, I got an excellent opportunity to see and reflect upon something that I had, till then, only read about in economics textbooks.

So, while waiting for my turn, I overheard two guys standing just behind me expressing their happiness at getting the first jab. Great! What really struck me, though, was their contentment and glee at the mere possibility of being able to ease down some “partly” mandatory and “partly” self-imposed restrictions, such as ever having to wear masks, always sanitizing hands, being extremely cautious to maintain social distancing at all times and the list is endless.

Seeing this, I was compelled to ask myself a few questions - do majority of people think the same way? What makes them think on these lines? What are/could be the consequences of such a thought? Is this only a transient state of happiness and contentment in our minds, which unknowingly presages future predicaments?

Coming back home, I spent some time ruminating on it. What I found was that most people mistakenly assume that getting vaccinated makes them invincible and gives them a chance to resume their pre-Covid normal life. As good as it might sound, it unfortunately isn’t true. And, why so? Two main reasons-firstly, complete immunity builds up a few weeks after having taken all the dosages of the vaccine; secondly, there is some probability that one may still contract the virus after getting the vaccine (as has been seen recently), just like there is some probability that a person dies in a car accident even after wearing a seatbelt.

What does this imply? If a person has to drive carefully even after taking the requisite safety measures, similarly one has to be cautious even after getting the jab. Makes sense, right?

Coming back, such laxity in people’s behavior explains what, in economic parlance, is known as “Peltzman Effect.” This effect has been named after Sam Peltzman, an economics professor at the University of Chicago, who found out that automobile safety measures do not really cause a decrease in automobile death rates, quite contrary to common understanding.

As I mentioned earlier, when a person takes the vaccine, his perception of risk decreases and he feels that he can afford to take riskier steps (like putting away his mask, not maintaining social distance or anything to such effect). As a result, the benefits supposed to be brought about by vaccines might either be partially or completely offset by the increase in such risky behavior; this may further facilitate the transmission of the virus. Moreover, people might also fall trap to the illusion that “herd immunity” has already been achieved, despite there being a lot of time left for that. This article highlights some misconceptions regarding herd immunity and subsequent repercussions.

The concept of “risk compensation” has indeed become quite familiar during Covid times. What is it, though? Initially, as the virus entered people’s lives, they perceived it to be threatening and wore masks, used sanitizers, avoided crowds and took other safety measures as a compensation to minimize the risk. However, the effects of risk compensation tend to fade away with time as the novelty of the threat wears off. The following is an excerpt regarding risk compensation with regard to Covid-19:

For COVID-19, this has manifested as “pandemic fatigue,” decreasing adherence to risk reduction strategies in some populations and complicating public health efforts. Now, as COVID-19 vaccines are rolled out across the globe amid messages of optimism and euphoria, public health officials will have to contend with another feature of risk compensation. A vaccine heralded as the panacea to the pandemic risks further weakens adherence to other safety measures like social distancing and masks.

It’s indeed surprising to see how people are ready to trade their safety for their reckless behavior arising out of a false sense of heightened security after getting vaccinated! However, as learners of economics, we are ever ready to expect negative externalities of a positive step like vaccination, aren’t we? But, obviously, only till the positives supersede the negatives.