Sample Essay on the Economics of Immunization in Australia

After the introduction of programs on vaccines, diseases outbreaks declined at substantial levels. This scenario has not been impressive in childhood diseases like measles mumps and rubella (MMR). The immunization programs have been beneficial and costly at the same time. Vaccines provide protection to children against diseases and their impacts. Through better health, vaccines promote children education and productivity at work. This research paper reviews the economic aspect of immunization in Australia.

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Overview of Immunization rates in Australia

In Australia, there have been high take up rates of infant MMR vaccines. As a result, these diseases have declined into negligible levels. For instance, according to Cooper (2009), Australian measles affects one individual in one million people. In 2011, measles and rubella immunization rates were 94 percent. Again, measles and mumps reported cases in 2011 were 190 and 145 respectively. However, More than half emanated from foreigners (WHO, 2012).

Overview of Immunization Policy in Australia

Australian government is strengthening its immunization programs among the children. From mid 2012, the Australian government entitles families to immunise fully their children to order to receive $726 per child as a Part A supplement of Family Tax Benefit (Australian Government, 2011). This policy program replaces the Maternity Immunization Allowance that provided $129 per child immunized within 18 to 24 months after birth and between 4-5 years of age. From mid 2013, the Australian government will add a combination of MMR and varicella vaccine to the National Immunization Program Schedule for children with age of 18 months (Australian Government, 2011).

Immunization Rates and Economic Theory

Inefficiency and unfairness characterise immunization markets; therefore, we can consider them as failed market or market failures. Market failure is a situation where free market operating through forces of demand and supply and without government intervention, fails to allocate resources fairly and efficiently (Anderton, 2006). Failure to allocate resources fairly and efficiently results into a loss of social and economic welfare of the society. Immunization programs without government intervention will constitute a market failure because the benefits they confer to the businesses and individuals will eventually diverge to the whole society (Anderton, 2006). In Australia, the market failure occurs because the immunization program constitutes a positive externality whose social benefit consumption exceed the benefits of private sector.

Again, immunization programs demand equity and fairness allocation. Actually, every child needs immunization. However, if immunization programs are left to the private sector and under free market where demand and supply forces rule, the market deficiencies will emerge (Anderton, 2006). Some notable deficiencies occur when private sector ignores some regions because of income level or population density. As a result, this action will engender unacceptable distribution of vaccines and consequent social exclusion of some children in need of immunizations.

Lack of perfect information (information asymmetry) characterizes immunization programs. With this situation, it implies that private sector will use this information gap to exploit consumers (Anderton, 2006). For instance, the private sector may under produce the vaccines forcing consumers to pay higher charges for the services. Due to their importance, immunizations of diseases such as of measles, mumps and rubella are relatively pure public goods or quasi-public goods. Therefore, avoiding some of these vaccines will constitute higher social costs to the society. These social costs include unproductively at work and poor learning environments for children. Therefore, the government intervention is important as it provides perfect information to population.

Critical Analysis of Economic Theory/Model v. Government Intervention

The Australian government is spending a lot of money in encouraging parents to immunise costs. One main model of implementing immunization programs is the use of incentives. Australian government uses incentive as a motivational factor of parent behaviour. Further, immunized children are entitled for Child Care Rebate and Childcare Benefit. The government is employing the concept negative prices – paying children after immunization. Considering the number of children born every year, the cost of immunization plus $726 per child constitutes large administration costs. These costs to some extend may outweigh welfare benefits. Such phenomenon may constitute the government failure (Anderton, 2006).

The measure of success or failure will depend on the vaccine rates noted after the implementation of the incentive programs. So far, the program has been successful. The first cases of incentives in Australian immunization programs linked to ACIR (Australian Childhood Immunization Register) occurred in 1998 (Hull, Deeks & McIntyre, 2009). Since the introduction of immunization incentives, in one decade, the national levels of vaccine recipients have increased at significant levels. That is, for children aged 12 months, 24 months and 72 months, the vaccines received rose to 91 percent, 93 percent and 88 percent respectively (Hull et al., 2009). This economic model of incentive provision is critical towards the implements of various measures of improving childhood vaccination.

There are objections surrounding the effectiveness and negative impacts associated with the administration of immunizations. For instance, some studies undertaken by anti-vaccines have shown that some vaccines cause autism (McGrath & Crighton, 2011). As a result, many parents have continued to object vaccines. The parents’ objection relates to the information asymmetry – they do not understand the signs of diseases as well as their respective vaccines (ABC, 2011). To overcome such issues, the Australian government current program is issuing letters to parents with newborns that contain immunization information and signs that parents can rely on to identify the diseases affecting their children. Through such letters, the Australian government will save an approximate of $209.1 million in four years (ABC, 2011).


Government led immunization programs are common in Australian. Current, the rates of immunization are as high as 94 percent for MMR. Government uses incentives to persuade parents to immunise their children. Current, the rates of immunization are as high as 94 percent for MMR. The government has considered incentives because many parents unwilling to immunise their children because of asymmetry of information. To curb information asymmetry, Australian government is issuing letters with diseases information and their respective vaccines.



Anderton, A. (2006). Economics third edition. Delhi: Dorling Kindersley Pvt Ltd.

Australian Broadcasting Corporation (ABC). (December 5, 2011). Immunise or lose benefits, parents told. ABC News. Retrieved from

Australian Government. (November 25, 2011). Strengthening immunization for children. Retrieved from$File/fact-v3.pdf

Cooper, D. (February 11, 2009). Australia declared measles free. ABC News. Retrieved from

Horvath, J. (July 18, 2007). Immunise Australia program: A decade review. NCIRS 10th Anniversary Conference. Sidney: University of Sidney

Hull, B. P. Deeks, S. L. & McIntyre, P. B. (2009). The Australian childhood immunization registers – A model for Universal immunization registers? Vaccine 27(37), 5054-5060

McGrath, J. & Crighton, P. (May 11, 2011). Vaccines need a short in the arm. Australian Nursing Journal 18(10), 40-41.

World Health Organization (WHO). (July 14, 2012). Immunization profile – Australia. Retrieved from



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