Article

Public and private incentives for self-protection

François Salanié, and Nicolas Treich

Abstract

Governments sometimes encourage or impose individual self-protection measures, such as wearing a protective mask in public during an epidemic. However, by reducing the risk of being infected by others, more self-protection may lead each individual to go outside the house more often. In the absence of lockdown, this creates a “collective offsetting effect”, since more people outside means that the risk of infection is increased for all. However, wearing masks also creates a positive externality on others, by reducing the risk of infecting them. We show how to integrate these different effects in a simple model, and we discuss when self-protection efforts should be encouraged (or deterred) by a social planner.

Replaces

Nicolas Treich, and François Salanié, Public and private incentives for self-protection, TSE Working Paper, n. 20-1090, April 2020.

Reference

François Salanié, and Nicolas Treich, Public and private incentives for self-protection, The Geneva Risk and Insurance Review, vol. 45, n. 2, July 2020, pp. 104–113.

See also

Published in

The Geneva Risk and Insurance Review, vol. 45, n. 2, July 2020, pp. 104–113