Indemnifying precaution: economic insights for regulation of a highly infectious disease
Affiliation
James E. Rogers College of Law, University of ArizonaDepartment of Agricultural and Resource Economics, University of Arizona
Eller College of Management, University of Arizona
Issue Date
2020-05-30
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Oxford University PressCitation
Robertson, C. T., Schaefer, K. A., Scheitrum, D., Puig, S., & Joiner, K. (2020). Indemnifying precaution: economic insights for regulation of a highly infectious disease. Journal of Law and the Biosciences, 7(1), lsaa032.Rights
© The Author(s) 2020. Published by Oxford University Press on behalf of Duke University School of Law, Harvard Law School, Oxford University Press, and Stanford Law School. This is an Open Access article distributed under the terms of the Creative Commons Attribution NonCommercial-NoDerivs licence (http://creativecommons.org/licenses/by-nc-nd/4.0/).Collection Information
This item from the UA Faculty Publications collection is made available by the University of Arizona with support from the University of Arizona Libraries. If you have questions, please contact us at repository@u.library.arizona.edu.Abstract
Economic insights are powerful for understanding the challenge of managing a highly infectious disease, such as COVID-19, through behavioral precautions including social distancing. One problem is a form of moral hazard, which arises when some individuals face less personal risk of harm or bear greater personal costs of taking precautions. Without legal intervention, some individuals will see socially risky behaviors as personally less costly than socially beneficial behaviors, a balance that makes those beneficial behaviors unsustainable. For insights, we review health insurance moral hazard, agricultural infectious disease policy, and deterrence theory, but find that classic enforcement strategies of punishing noncompliant people are stymied. One mechanism is for policymakers to indemnify individuals for losses associated with taking those socially desirable behaviors to reduce the spread. We develop a coherent approach for doing so, based on conditional cash payments and precommitments by citizens, which may also be reinforced by social norms.Note
Open access journalISSN
2053-9711EISSN
2053-9711Version
Final published versionae974a485f413a2113503eed53cd6c53
10.1093/jlb/lsaa032
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Except where otherwise noted, this item's license is described as © The Author(s) 2020. Published by Oxford University Press on behalf of Duke University School of Law, Harvard Law School, Oxford University Press, and Stanford Law School. This is an Open Access article distributed under the terms of the Creative Commons Attribution NonCommercial-NoDerivs licence (http://creativecommons.org/licenses/by-nc-nd/4.0/).