Risk compensation after COVID-19 vaccination

Could COVID-19 be more efficacious than effective? This could be the case if individuals receiving COVID-19 engaged in ‘risk compensation’. In short, without a COVID-19 vaccine, individuals may have refrained from travel and engaged in social distancing. After a COVID-19 vaccine, these same individuals could have been more likely to travel and less likely to engage in social distancing due to their lower health risk from COVID-19. Formally,

Risk compensation, also known as risk homeostasis or the Peltzman effect, is a theory which states that people are more likely to engage in risky behaviors when they perceive lower levels of risk. According to the theory, the protective effect of a safety measure will be smaller than what it is a priori expected to be due to such behavioral response. 

A key empirical question, then, is whether vaccinated individuals did engage in more risky behaviors after vaccination.

A paper by Hwang et al. (2024) aims to answer this question. They use the fact that South Korea engaged in a phased rollout of COVID-19 vaccines by exact birth date; this serves as a nice natural experiment for testing risk compensation. The data used were high-frequency administrative data (credit card and airline data) as well as survey data to measure vaccine take-up and social distancing behaviors. Vaccination rates come from the Korea Disease Control and Prevention Agency (KDCA); these data are used in a first stage estimate of the impact of birth date on likelihood of receiving a vaccine. To evaluate if vaccination status impacted risky behavior, data from credit card transactions, daily travel, and survey was used. The credit card data comes from Shinhan Card, the company with the largest market share (21.5%) in South Korea. The authors examine whether individuals visited restaurants and engaged in offline shopping; specifically, the examine the number of offline credit card transactions per day (excluding medical expenditures). Flight information comes from Jeju Air, which has the largest domestic flight market share in South Korea (17%); these data are used to measure number of flying days per person. The survey also gives self-reported information on both vaccination rates and risky behaviors.

Using this approach, the authors find that:

Applying a regression discontinuity design based on birth date cutoffs for vaccine eligibility, we find no evidence of risk-compensating behaviors, as measured by large, high-frequency data from credit card and airline companies as well as survey data. We find some evidence of self-selection into vaccine take-up based on perception toward vaccine effectiveness and side effects, but the treatment effects do not differ between compliers and never-takers.

In short, risk compensation was not a major issues for COVID-19 vaccination in South Korea.