The monetary value of a vaccine that could potentially end the COVID-19 pandemic is between 5 percent and 15 percent of worldwide wealth, according to a study posted on the website of the University of Illinois (UI) on Monday.

The researchers estimated the value of a vaccine -- what a "representative agent" would be willing to pay to end the ongoing pandemic -- using the joint behavior of stock prices and a novel vaccine progress indicator based on the chronology of stage-by-stage progress of individual vaccine candidates and related news.

The stock market response to news of vaccine progress allowed the researchers to calibrate a model to estimate the economy-wide financial gain that would be attributable to a cure. To accomplish this, the researchers first needed to summarize the entire corpus of existing vaccine research, spanning several hundred projects worldwide that are racing to develop different versions of a vaccine.

"One of the contributions of the paper is that we introduce a forecasting methodology for a very high-dimensional research endeavor that boils everything down to the one number that we think is most important, which is the expected time to the arrival and deployment of a vaccine," said Timothy Johnson, a professor of finance at UI's Gies College of Business. "It's really a statistical approach to the economics of a pandemic, but we think it's a novel contribution nonetheless."

From a policy perspective, the implication of the findings are that, while working to end the current pandemic is enormously valuable, equally and perhaps even more valuable is anything that resolves uncertainty about the frequency and, especially, the duration of current and future pandemics, Johnson said.

"In addition to developing cures and vaccines, understanding the fundamental science behind the fight against viral pathogens and investing in the infrastructure for future responses can provide crucial gains to welfare," Johnson said.