HERO Online Working Paper Series,
University of Oslo, Health Economics Research Programme

Abstract: Screening for genetic diseases is performed in many regions and/or ethnic groups where there is a high prevalence of possibly malign genes. The propagation of such genes can be considered dynamic externality. Given that many of these diseases are untreatable and give rise to truly tragic outcomes they are a source for societal

concern and the screening process should perhaps be regulated.

The present paper incorporates a standard model of genetic propagation into an economic model of dynamic management. The paper derives cost benefit rules for optimal screening. The highly non-linear nature of genetic dynamics gives rise to perhaps surprising results which include discontinuous controls and threshold effects. One insight is that a screening program, if at all in place at all at some point in time, should screen all individuals.

Keywords: Screening programme; Genetic diseases; Dynamic management

JEL-codes: I18

30 pages, June 2, 2009

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