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- Do we have enough vaccines for India to roll out doses to everybody who is 18+?
- Will increasing the price at which these vaccines are purchased increase the supply?
Yes. I teach this for a living, as do thousands of economists the world over, and there is no way our answer to this question ought to be anything except a resounding “Yes”.
An increase in the price at which we’re willing to buy a good will increase the supply of that good.
- Is that the only way to increase the supply of these vaccines?
No. Murali Neelakantan and I outlined some of the possible ways in this article. A fuller explanation is available here, but it is behind a paywall, alas.
- But… aren’t we suggesting nationalization, or something like that? It doesn’t sound free-market-ish.
And indeed it isn’t. Price based market mechanisms are, under normal circumstances, infinitely preferably to other mechanisms. I strongly disagree with anybody who states otherwise.
Growth maximization above all, subject to the right to live and climate considerations is a philosophy that is hard to argue against. And growth maximization happens best with market based price mechanisms.
But I also strongly disagree with people who will say that these are normal circumstances!
And under these circumstances, I think it makes sense to ask if other options have the ability to increase supply. Especially in the short run. A 350,000 daily caseload number with a CFR of even 0.1% is reason enough for me.
Put another way, if the opportunity cost of sticking to only market-based price mechanisms is lives lost because of insufficient vaccines, is it worth the trade-off?
To me, no. This is that one year out of a hundred where you do what it takes, no matter what.
- So what do we do next?
Run the numbers! If we adopt the solutions that have been outlined in the Scroll piece, how much does vaccine production go up by? And by when? If we find out that it goes up by only 1% against the baseline (do nothing) scenario, and that only after six months, then it is not worth it.
But, on the other hand, if we find that it is possible to increase supply by 25% by the end of May as against the do-nothing scenario, then sign me up for this plan.
Again, run the numbers.
- So have we run the numbers?
As best as I can tell, no. There is no analysis that I can find online (published by the government or otherwise) that has run these scenarios.
Running the numbers is complicated, I appreciate that. It is not just a simple question of saying “x” is the monthly capacity of plant “y”. There’s supply chain bottlenecks, efficiency considerations, learning curves, technology transfers and much more involved. But is developing this model necessary? For reasons answered in questions 1-5, I think so, yes.
- So why don’t I run the numbers?
Why not indeed? But before I try, if any of you have…
…any information about whether or not this has already been done by somebody
…arguments for why this should not be done…
Please, do let me know.
Also, if any of you have any links that will be helpful in this analysis, please, do let me know.