The Korean Journal of Economic Studies
A Real Options Study on Avian Influenza Vaccine Stockpile Using a Stochastic Process
Jinyoung Jeong (Korea Energy Economics Institute), Hojeong Park (Korea University) and Heesun Jang (Korea Energy Economics Institute)Year 2019Vol. 67No. 1
As the spread of pandemic disease could have a profound impact on therelated industry and the national economy, it is necessary to conduct the studyon the optimal vaccine stockpile from an economic perspective for preventingepidemics in the world. However, since the traditional model in economicscould not sufficiently consider the uncertainty of disease spread, it is requiredto make an integrated model combining epidemiology and economics. Thisstudy is the first in Korea that calculates optimal vaccine stockpile of highlypathogenic avian influenza (HPAI), using an economic-epidemiological modelwith a real option approach. In addition, it derives the critical infectious rateof vaccination, which is 32.37 million vaccines that should be stockpiled, andthis value could not be estimated in the conventional epidemiological model.