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  5. Direct and Indirect Effects of Vaccines: Evidence from COVID-19

American Economic Journal:
Applied Economics

ISSN 1945-7782 (Print) | ISSN 1945-7790 (Online)

Direct and Indirect Effects of Vaccines: Evidence from COVID-19

  • Seth Freedman
  • Daniel W. Sacks
  • Kosali Simon
  • Coady Wing
American Economic Journal: Applied Economics (Forthcoming)

Abstract

We estimate direct and indirect vaccine effectiveness and assess how far the infection-reducing externality extends from the vaccinated, a key input to policy decisions. Our empirical strategy uses nearly-universal microdata from a single state and relies on the six-month delay between 12- and 11 year-old COVID vaccine eligibility. Vaccination reduces cases by 80 percent, the direct effect. This protection spills over to close contacts, producing a household-level indirect effect about three-fourths as large as the direct effect. However, indirect effects do not extend to schoolmates. Our results highlight vaccine reach as important to consider when designing policy towards infectious disease.

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