Conditional money transfers are effective—individuals who were previously unwilling to get vaccinated are incentivized to.

To increase the perceived benefits of vaccination, a growing number of governments have implemented conditional cash lotteries (CCLs) that offer opportunities to win large prizes only available to vaccinated individuals. A CCL incentive is promising in this context because of its targeted nature: people with a greater propensity to decline vaccination are also more likely to assign a higher expected value to a lottery, a behavioral phenomenon known as probability neglect. Our paper evaluates the first CCL for COVID-19 vaccinations, which Ohio implemented during May and June of 2021. We find that Ohio’s initiative significantly increases vaccinations—successfully encouraging more than 82,000 Ohioans who would otherwise not be vaccinated, an increase of 1.5 percent. Furthermore, we estimate that this surge in vaccinations then decreases COVID-19 prevalence within the state, reducing infections and ICU utilization by at least 1.3 percent and 2.6 percent, respectively.

These estimates allow us to assess the cost-effectiveness of the program. In a large study of COVID-19 patients, Di Fusco et al. (2021) find that the average hospital bill per day in the ICU is around 13,500 dollars. Using our estimate of the number of ICU patient-days averted, we calculate that the total benefit from avoiding these charges is approximately 66 million dollars. Additionally, there are substantial other social benefits from the 15,000 (or more) cases prevented, such as quality of life enrichment—especially for those who avoid cases of “long-haul COVID,” where symptoms persist for months or longer—and potentially lives saved. Given that the total cost of Ohio’s Vax-A-Million incentive scheme is 5.6 million dollars, the benefits of the CCL unquestionably exceed the program’s cost.

Hesitancy towards vaccines has been rising globally in recent years, creating a significant challenge for policymakers. In lieu of mandates, governments are increasingly turning to other instruments to improve vaccination rates. Our evidence from Ohio’s program illustrates that financial incentives—and conditional cash lotteries more specifically—are an effective means to increase vaccine uptake in areas plagued by vaccine hesitancy. And while this group may be larger in a state like Ohio, it is far from an outlier in this regard. Although a CCL is certainly not a panacea, we show that it can be a cost-effective component of a broader policy mix to increase vaccine uptake, with compelling potential to support other public health objectives as well.