Using the SIR model Therefore,a vaccine subsidy will be effective if: Vaccine demand is price elastic Subsidy will increase vaccine demand Infectivity is low Low B means more people are susceptible and therefore the market for vaccination is larger 3)Prevalence elasticity is low Reduction in disease prevalence does not reduce demand for vaccine Bhattacharya,Hyde and Tu-HealthEconomicsBhattacharya, Hyde and Tu – Health Economics Using the SIR model 1) Vaccine demand is price elastic  Subsidy will increase vaccine demand 2) Infectivity is low  Low β means more people are susceptible and therefore the market for vaccination is larger 3) Prevalence elasticity is low  Reduction in disease prevalence does not reduce demand for vaccine  Therefore, a vaccine subsidy will be effective if: