Human Mortality and the Vaccine Conundrum: Lessons in Microeconomics

Every couple of days or so I think about dying. Maybe when I’m in the shower or brushing my teeth. I like to remind myself: hey, if I mess this up and lose a couple of teeth, they weren’t meant to last forever. It’s kind of reassuring. It takes the pressure off of menial tasks. It reminds me to be thankful that the water is warm and the towels are dry and we live in the best of all possible worlds — even if it is the only possible world. It also reminds me that if time is limited, it might be in my best interest to use it efficiently and possibly follow behaviors that could extend what time I have.

But behaviors are funny things. I am in my twenties, I am busy and carefree and healthy. The concept of my own mortality is real but still looms very distantly in the background (my probability of dying this year is only 0.000458). And although I’m more likely to die this year than win at Mega Millions (probability of 0.000000003863), I’d rather buy the Mega Millions ticket than buy something which may help evade that mortality statistic for one more year. For example: a flu vaccine.

I have never purchased a flu vaccine. I don’t foresee buying one in the near future and I’m not the only one. Among people ages 18 to 49, the flu vaccine coverage rate was only 28.6 percent during last year’s flu season. This rate has remained relatively stable since 2009, with coverages highest for elderly adults and infants. In other words, coverage is generally highest when vaccination is not voluntary (i.e. parents are deciding for their children). But why are we not volunteering? The flu vaccine is cheap. For the manufacturing price of about $10, I can get immunized against four strains of flu. If I don’t like needles, I can get the nasal spray vaccine, FluMist. If I have paranoia, I can get a preservative-free alternative. If I’m too cheap to pay $10, insurance usually covers the cost. So why have I never been vaccinated against flu?

The answer can be explained by microeconomics.

The death rate for flu is relatively low; the CDC has estimated that 3,000 to 49,000 people in the U.S. died from flu or flu-related complications over the past 30 years. Death risk is low but so is the effort involved in getting vaccinated. Perhaps my behavior (choosing not to get vaccinated) is logical if we factor in some cost-benefit analysis.

In economics, the term “incentive” is used to describe what motivates people to take certain actions. Though vaccination seems like it comes with the incentive of good health in the future, the risk of getting sick is often much lower than the benefit of avoiding getting sick, a reason why many vaccines are mandatory. As microeconomics tells us in the cost-benefit principle: a rational individual should only take an action if, and only if, the extra benefits from taking the action outweigh the extra costs. If we are rational individuals, we probably are not getting vaccinated because the extra benefits of getting a shot are not outweighed by the extra costs of going out and getting it. In the case of flu, we can crunch some numbers to calculate these costs and benefits:

The chance any given person will get the flu is 5-20%.

The chance that the 2013-2014 flu vaccine is effective is 35-78% (depending on strain, average 56.5%). This decreases to even lower levels as immunity wanes in as little as 100 days. Some reports from last year’s vaccine have shown drops in effectiveness to as low as -1% after six weeks (meaning that subjects appeared marginally more likely to get flu six weeks after vaccination compared to unvaccinated controls).

The cost of getting the vaccine: $10-20 vaccination cost (could be as high as $50, but let’s go low and say $15) +$0-104 (free at pharmacy to the average cost for a 15 min. doctor appointment) + $40 opportunity cost (from missing two hours of work during which you could be making, a low estimate $20/hr) = $60-180

We then discount the cost of getting the vaccine by the benefit of not getting the flu. Because the vaccine has an effectiveness on average of only 56.5%, we multiply the cost of getting the flu, calculated below, by the effectiveness rate, and that is discounted from the vaccine cost to get the net cost of getting a flu shot. $120-($30.75*.565)= $102.78

The cost of not getting the vaccine ranges from $0 (if you avoid flu) to the cost of getting the flu.

The cost of getting the flu: $104 (avg. doctor’s appointment cost) + $100 (Tamiflu) + $40 opportunity cost = $244 (if treated, high estimate)

BUT the cost of getting the flu is relative to the risk of incurring those costs. To calculate the net cost of getting the flu we multiply the cost by the risk.

$244 x (5 to 20% chance of getting flu) = average of $30.75, then discounted by the benefit in time saved by not getting the vaccine ($30.75-102.78) = -$72.03.

The cost here is negative. A negative cost translates to a net gain, or a financial savings.

It doesn’t take much math to understand that the incentive for any individual to get vaccinated is low. Here, it is the choice between spending $102.78 (calculated net cost of vaccine) or saving $72.03. Most of us pick the saving. If the chance of getting flu were higher or the vaccine had a higher effectiveness, costs would change and maybe benefits could outweigh them. But on average, the anticipated cost is higher than the anticipated benefits.

With less than a third of young adults opting out of the flu shot, most of us seem to be making the same decision: the hassle cost of getting a vaccine outweighs the lower-risk of flu benefit. The above calculations agree with the logic the majority of us are using. As a society, however, this presents a problem. The cost for an individual may outweigh the benefit to that individual, but the cost for that individual does not outweigh the benefit that the same individual could bring to society. Ben Bernanke has made note of these types of dilemmas in his book Principles of Microeconomics: there are some actions that are “smart for one, dumb for all.” Avoiding a vaccine is “smart” for an individual but imposes higher risk to the rest of the society, and thus “dumb” if considering one’s community (your friends, family, neighbors). The more people that are vaccinated, the lower the chances of getting flu for everyone. The less people we have taking sick days, the higher productivity of the workplace. So how can we change our current vaccination system to avoid this dilemma of “smart for one, dumb for all”? Once again, microeconomics tells us that people will only change their behaviors when there is incentive to do so. The incentive to get a vaccine increases when the cost is lowered and the benefit is raised. It looks like we need to figure out how to increase the efficacy of vaccines, lower healthcare costs and decrease opportunity costs in order to raise the dismal proportion of Americans getting their flu shot. Let’s add that to the American healthcare to-do list.

Infographic on death risk for activities, non-flu related, courtesy of

Infographic on death risk for activities, non-flu related, courtesy of


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