Measuring the full effect of COVID-19 vaccines

After the COVID-19 pandemic upended the world's daily life in March 2020, research scientists and biotechnology firms raced to develop an efficacious vaccine. This paper aims to quantify the full value effect of these vaccines on social surplus by estimating the impact of key events in their development on asset prices and measuring the prior market belief of such events occurring using call options. I find there was considerable uncertainty regarding the development of these vaccines. A conservative lower bound on the total market value is around $2.98 trillion. Pharmaceutical and biotechnology firms involved capture an extremely small portion of market returns, demonstrating the important positive externalities of mRNA COVID-19 vaccines.