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  • September 2022
  • Article
  • Management Science

Health Externalities and Policy: The Role of Social Preferences

By: Laura Alfaro, Ester Faia, Nora Lamersdorf and Farzad Saidi
  • Format:Print
  • | Pages:11
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Abstract

Social preferences facilitate the internalization of health externalities, for example by reducing mobility during a pandemic. We test this hypothesis using mobility data from 258 cities worldwide alongside experimentally validated measures of social preferences. Controlling for time-varying heterogeneity that could arise at the level at which mitigation policies are implemented, we find that they matter less in regions that are more altruistic, patient, or exhibit less negative reciprocity. In those regions, mobility falls ahead of lockdowns, and remains low after the lifting thereof. Our results elucidate the importance, independent of the cultural context, of social preferences in fostering cooperative behavior.

Keywords

Social Preferences; Pandemics; Mobility; Health Externalities; Mitigation Policies; Health Pandemics; Cooperation; Behavior; Policy

Citation

Alfaro, Laura, Ester Faia, Nora Lamersdorf, and Farzad Saidi. "Health Externalities and Policy: The Role of Social Preferences." Management Science 68, no. 9 (September 2022): 6751–6761.
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About The Author

Laura Alfaro

General Management
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  • Doing Business in Boston, Massachusetts By: Laura Alfaro, Leonard A. Schlesinger and Zeke Gillman
  • FIELD Immersion 2022: Lawrence, Massachusetts By: Laura Alfaro and Tom Quinn
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