Trade-offs and Policy Options — Using Insights from Economics to Inform Public

In May 2020, Mr. B., a 45-year-old Black American man with a history of insulin-dependent type 2 diabetes, was hospitalized for SARS-CoV-2 pneumonia. He was a home health care worker who traveled to his clients’ homes using public transportation. Mr. B. lived with his wife and two children. His children were attending school remotely because of the Covid-19 pandemic. Prior to his hospitalization, Mr. B. had been having difficulty breathing and had a mild fever, but he continued to work because he was the sole source of support for his family and needed money to pay for his insulin. Eventually, his symptoms worsened, necessitating admission to the hospital.

Mr. B’s case reflects the difficulties many people have faced during the global pandemic, which have starkly illuminated the importance of public health interventions. Despite the development of effective SARS-CoV-2 vaccines, many experts have argued that preventive behaviors such as masking, frequent testing, and physical distancing continue to be critical for reducing disease spread. But adoption of these behaviors has been far from universal, and the burden of disease has fallen disproportionately on marginalized populations such as racial and ethnic minorities, low-income adults, and disabled persons.

We believe that economics can critically inform public health efforts to address such challenges. Alfred Marshall, writing in 1890, defined economics as “a study of mankind in the ordinary business of life…[that] examines that part of individual and social action which is most closely connected with the attainment and with the use of material requisites of well-being.” Put simply, economics is the study of trade-offs that individuals, institutions, or countries face when making decisions under resource and time constraints. Although public health practitioners and researchers understandably focus primarily on improving health, economists view health as but one, albeit an important, component of what people may value.¹ This insight is a key aspect of economics’ utility for informing public health policy.

Key Components of Economic Models in Public Health.

Economic modeling can be complex, but the key concepts that can guide decision making are intuitive and accessible to noneconomists. Mr. B.’s case provides a useful starting point for understanding how we can use economic insights to increase population-level adoption of preventive behaviors and reduce inequalities in health outcomes (see table).

The first step in building an economic model is to identify the relevant actors (i.e., the parties whose health, and adoption of health behaviors, we wish to maximize). In this case, Mr. B. is the main actor. Next, we must identify the benefits these actors accrue from adopting a health-related behavior. Is adopting this behavior a priority? If so, how does it rank relative to competing priorities? People may overlook the benefits of a particular behavior, including how it improves their health. Conversely, they may not fully account for the true costs of their behavior to others or society (especially when that behavior increases the risk of making others ill) or the costs to…