Optimal time to intervene: The case of measles child immunization

The recent measles outbreaks in US and Germany emphasize the importance of sustaining and increasing vaccination rates. In Slovakia, despite mandatory vaccination scheme, decrease in the vaccination rates against measles has been observed in recent years. Different kinds of intervention at the state level, like a law making vaccination a requirement for school entry or education and advertising seem to be the only strategies to improve vaccination coverage. This study aims to analyze the economic effectiveness of intervention in Slovakia. Using real options techniques we determine the level of vaccination rate at which it is optimal to perform intervention. We represent immunization rate of newborns as a stochastic process and intervention as a one-period jump of this process. Sensitivity analysis shows the importance of early intervention in the population with high initial average vaccination coverage. Furthermore, our numerical results demonstrate that the less certain we are about the future development of the immunization rate of newborns, the more valuable is the option to intervene.