nep-hea New Economics Papers
on Health Economics
Issue of 2020‒05‒11
33 papers chosen by
Nicolas R. Ziebarth
Cornell University

  1. Managing Intelligence: Skilled Experts and AI in Markets for Complex Products By Jonathan Gruber; Benjamin R. Handel; Samuel H. Kina; Jonathan T. Kolstad
  2. The Health Returns of University Eligibility By Heckley, Gawain; Nordin, Martin; Gerdtham, Ulf-G.
  3. The Education-Health Nexus: A Meta-Analysis By Xue, X.;
  4. Modelling healthcare costs: a semiparametric extension of generalised linear models By Chen, J.;; Gu, Y.;; Jones, A.M.;; Peng, B.;
  5. Short- and Long-Term Consequences of Serious Parental Health Shocks By Ida Lykke Kristiansen
  6. Non-Pharmaceutical Interventions and Mortality in U.S. Cities during the Great Influenza Pandemic, 1918-1919 By Robert J. Barro
  7. Health Insurance and Hospital Supply: Evidence from 1950s Coal Country By Theodore F. Figinski; Erin Troland
  8. Present-Focused Preferences and Sin Goods Consumption at the Extensive and Intensive Margins By Zarko Kalamov; Marco Runkel
  9. Does Proximity to Fast Food Cause Childhood Obesity? Evidence from Public Housing By Jeehee Han; Amy Ellen Schwartz; Brian Elbel
  10. Understanding the role of inequality of opportunity in body mass index and waist circumference among Mexican adults By Salas-Ortiz, A.;
  11. Paying for Free Lunch: The Impact of CEP Universal Free Meals on Revenues, Spending, and Student Health By Michah W. Rothbart; Amy Ellen Schwartz; Emily Gutierrez
  12. Variation in Performance of Commonly Used Statistical Methods for Estimating Effectiveness of State-Level Opioid Policies on Opioid-Related Mortality By Beth Ann Griffin; Megan S. Schuler; Elizabeth A. Stuart; Stephen Patrick; Elizabeth McNeer; Rosanna Smart; David Powell; Bradley Stein; Terry Schell; Rosalie Liccardo Pacula
  13. Who Has Benefited from Nursing Home Expansion in Japan?: The Effects of Government Supply-Side Intervention in the Elderly Care Market By Nishimura, Y.;; Oikawa, M.;
  14. Cognitive Consequences of Iodine Deficiency in Adolescence: Evidence from Salt Iodization in Denmark By Benjamin Ly Serena
  15. The Timing of Early Interventions and Child and Maternal Health By Jonas Lau-Jensen Hirani; Hans Henrik Sievertsen; Miriam W�st; Johannes Wohlfart
  16. Biomarkers, disability and health care demand By Davillas, Apostolos; Pudney, Stephen
  17. Seasonal variation in infant mortality in India By Gupta, Aashish
  18. The Effect of Social Distancing Measures on Intensive Care Occupancy: Evidence on COVID-19 in Scandinavia By Juranek, Steffen; Zoutman, Floris T.
  19. Social distancing and contagion in a discrete choice model of COVID-19 By Baskozos, Giorgos; Galanis, Giorgos; Di Guilmi, Corrado
  20. Health versus Wealth: On the Distributional Effects of Controlling a Pandemic By Andrew Glover; Jonathan Heathcote; Dirk Krueger; José-Víctor Ríos-Rull
  21. Firearm Sales and the COVID-19 Pandemic By Matthew D. Lang; Bree J. Lang
  22. Sequential Lifting of COVID-19 Interventions with Population Heterogeneity By Adriano A. Rampini
  23. A crisis in times of crisis: Combating COVID-19 under sanctions in Iran By Chowdhry, Sonali; Jacobs, Anna-Katharina; Kamin, Katrin
  24. Two Burning Questions on COVID-19: Did shutting down the economy help? Can we (partially) reopen the economy without risking the second wave? By Anish Agarwal; Abdullah Alomar; Arnab Sarker; Devavrat Shah; Dennis Shen; Cindy Yang
  25. Macroeconomic impacts of the public health response to COVID-19 By Eric Kemp-Benedict
  26. Virus Dynamics with Behavioral Responses By Krishna Dasaratha
  27. Economic Activity and the Value of Medical Innovation during a Pandemic By Casey B. Mulligan
  28. Fake news in the time of environmental disaster: Preparing framework for COVID-19 By Azim, Syeda Saadia; roy, arindam; Aich, Amitava; Dey, Dipayan
  29. On the Optimal "Lockdown" during an Epidemic By Martín Gonzalez-Eiras; Dirk Niepelt
  30. The Hammer and the Dance: Equilibrium and Optimal Policy during a Pandemic Crisis By Fève, Patrick; Assenza, Tiziana; Collard, Fabrice; Dupaigne, Martial; Hellwig, Christian; Kankanamge, Sumudu; Werquin, Nicolas
  31. A synthetic indicator on the impact of COVID-19 on community’s health By Carmen Herrero Blanco; Antonio Villar Notario
  32. Demographic Perspectives on Mortality of Covid-19 and Other Epidemics By Joshua R. Goldstein; Ronald D. Lee
  33. The reproduction number in the classical epidemiological model By Quaas, Georg

  1. By: Jonathan Gruber; Benjamin R. Handel; Samuel H. Kina; Jonathan T. Kolstad
    Abstract: In numerous high stakes markets skilled experts play a key role in facilitating consumer choice of complex products. New artificial intelligence (AI) technologies are increasingly being used to augment expert decisions. We study the role of technology and expertise in the market for health insurance, where consumer choices are widely known to be sub-optimal. Our analysis leverages the large-scale implementation of an AI-based decision support tool in a private Medicare exchange where consumers are randomized to skilled agents over time. We find that, prior to AI-based technology, skilled experts in this market exhibit the same type of inconsistent behavior found in previous studies of individual choices, costing consumers $1260 on average. The addition of AI-based decision support improves outcomes by $278 on average and substantially reduces heterogeneity in broker performance. Experts efficiently synthesize private information, incorporating AI-based recommendations along dimensions that are well suited to AI (e.g. total expected patient costs), but overruling AI-based recommendations along dimensions for which humans are better suited (e.g. specifics of doctor networks). As a result, switching plans, an ex-post measure of plan satisfaction, is meaningfully lower for agents making AI-based recommendations. While AI is a complement to skill on average, we find that it is a substitute across the skill distribution; lower quality agents provide better recommendations with AI than the top agents did without it. Overall productivity rises, with the introduction of decision support associated with a 21% reduction in call time for enrollment.
    JEL: I13 J24 L15
    Date: 2020–04
  2. By: Heckley, Gawain (Department of Clinical Sciences, Lund University, Sweden); Nordin, Martin (AgriFood Economics Centre, Lund University); Gerdtham, Ulf-G. (Department of Economics, Lund University)
    Abstract: This paper exploits an arbitrary university eligibility rule in Sweden combined with regression discontinuity to estimate the impact of university education on health derived demand for medical care. We find a clear jump in university attendance due to university eligibility of between 10 and 14 percentage points. For females this implies a 30-40% drop in self-harm. For males it coincides with reduced use of prescribed pain killers, implying reduced risky behaviour. Males also observe a 30% increase in mental disorders, almost exclusively related to alcohol. The spillovers of university education on to health for the marginal student are therefore significant.
    Keywords: Health returns to education; demand for medical care; Regression Discontinuity Design
    JEL: I10 I23 I26
    Date: 2020–04–24
  3. By: Xue, X.;
    Abstract: Does education cause a better health? No consensus answer to this question has yet emerged. In this paper, I perform a meta-analysis of the extensive literature on the health effects of education. The final sample identifies 105 studies with 4,671 estimates. Overall, the health effect of education is not economically meaningful, although statistically significant. There is severe publication bias favoring the positive effect of education on health. Studies that do not control for endogeneity are prone to exaggerate the estimated effect. In addition, the effect becomes weaker for more recent studies. The results suggest that education may not be a feasible policy option for promoting population health.
    Keywords: education; health; human capital; meta-analysis; research synthesis;
    JEL: B49 C49 I10 I20 I31
    Date: 2020–01
  4. By: Chen, J.;; Gu, Y.;; Jones, A.M.;; Peng, B.;
    Abstract: The empirical and methodological efforts in using the generalised linear model to model healthcare costs have been mostly concentrated on selecting the correct link and variance functions. Another type of misspecification - misspecification of functional form of the key covariates - has been largely neglected. In many cases, continuous variables enter the model in linear form. This means that the relationship between the covariates and the response variable is entirely determined by the link function chosen which can lead to biased results when the true relationship is more complicated. To address this problem, we propose a hybrid model incorporating the extended estimating equations (EEE) model and partially linear additive functions. More specifically, we partition the index function in the EEE model into a number of additive components including a linear combination of some covariates and unknown functions of the remaining covariates which are believed to enter the index non-linearly. The estimator for the new model is developed within the EEE framework and based on the method of sieves. Essentially, the unknown functions are approximated using basis functions which enter the model just like the other predictors. This minimises the need for programming as the estimation itself can be completed using existing EEE software programs. The new model and its estimation procedure are illustrated through an empirical example focused on how children’s Body Mass Index (BMI) z-score measured at 4-5 years old relates to their accumulated healthcare costs over a 5-year period. Results suggest our new model can reveal complex relationships between covariates and the response variable.
    Keywords: body mass index; extended estimating equations; generalised linear model; healthcare cost; sieve estimation;
    JEL: C14 I10 P46
    Date: 2020–02
  5. By: Ida Lykke Kristiansen (CEBI, Department of Economics, University of Copenhagen)
    Abstract: I show that serious, yet common, parental health shocks in childhood have immediate and lasting effects on mental health and human capital formation for children. Children who experience a parental health shock are more likely to have therapy and take anti-depressant medication following the shock. These children have lower test scores and school enrollment rates. The effect occurs immediately following the shock and persists at least into early adulthood. I find that the effect on test scores is no different for children in high- and lowincome families, but the families react differently to the shock; children from low-income families are more likely to be prescribed anti-depressants following the shock, while children from high-income families are more likely to have therapy. In addition, I find suggestive evidence that children who take anti-depressants following a parental health shock have lower educational attainments in early adulthood, while therapy doesn't have harmful long-term effects.
    Keywords: Parental health shocks, Parental death, Mental health, Education
    JEL: I10 I14 I20 I24
    Date: 2020–03–30
  6. By: Robert J. Barro
    Abstract: Non-pharmaceutical public-health interventions (NPIs) were measured by Markel, et al. (2007) for U.S. cities during the second wave of the Great Influenza Pandemic, September 1918-February 1919. The NPIs were in three categories: school closings, prohibitions on public gatherings, and quarantine/isolation. Although an increase in NPIs flattened the curve in the sense of reducing the ratio of peak to average deaths, the estimated effect on overall deaths was small and statistically insignificant. The likely reason that the NPIs were not more successful in curtailing mortality is that the interventions had an average duration of only around one month.
    JEL: I1 I15
    Date: 2020–04
  7. By: Theodore F. Figinski; Erin Troland
    Abstract: The United States government spends billions on public health insurance and has funded a number of programs to build health care facilities. However, the government runs these two types of programs separately: in different places, at different times, and for different populations. We explore whether access to both health insurance and hospitals can improve health outcomes and access to health care. We analyze a coal mining union health insurance program in 1950s Appalachia with and without a complementary hospital construction program. Our results show that the union insurance alone increased hospital births and reduced infant mortality. Once the union hospitals opened, however, the insurance and the hospitals together substantially increased the net amount of hospital beds and health care employees, with limited crowd-out of existing private hospitals. Our results suggest that hospitals can complement health insurance in underserved areas.
    Keywords: Public economics; Health care; Economic history; Urban, Rural, & Regional Economics; Health economics
    JEL: H51 I13 I18 N32 R58
    Date: 2020–04–17
  8. By: Zarko Kalamov; Marco Runkel
    Abstract: This paper analyzes sin goods consumption when individuals exhibit present-focused preferences. It considers three types of present focus: present-bias with varying degrees of naiveté, Gul-Pesendorfer preferences, and a dual-self approach. We investigate the incentives to deviate from healthy consumption (the extensive margin). In the first model, the extensive margin of consumption is independent of the degree of present-bias and naiveté. Likewise, in the latter frameworks, the strength of temptation and the cost of self-control do not affect the extensive margin. Hence, present-focused preferences affect the intensive margin of sin goods consumption, but not the extensive margin.
    Keywords: present-bias, self-control, temptation, dual-self, sin goods
    JEL: D11 D60 D91 I12
    Date: 2020
  9. By: Jeehee Han (Center for Policy Research, Maxwell School, Syracuse University, 426 Eggers Hall, Syracuse, NY 13244); Amy Ellen Schwartz (Center for Policy Research, Maxwell School of Citizenship and Public Affairs, Syracuse University); Brian Elbel (New York University)
    Abstract: We examine the causal link between proximity to fast food and the incidence of childhood obesity among low-income households in New York City. Using individual-level longitudinal data on students living in public housing linked to restaurant location data, we exploit the naturally occurring withindevelopment variation in distance to fast food restaurants to estimate the impact of proximity on obesity. Since the assignment of households to specific buildings is based upon availability at the time of assignment to public housing, the distance between student residence and retail outlets—including fast food restaurants, wait-service restaurants, supermarkets, and corner stores—is plausibly random. Our credibly causal estimates suggest that childhood obesity increases with proximity to fast food, with larger effects for younger children.
    Keywords: Urban Neighborhoods, Food Environment, Child Health and Obesity, Public Housing
    JEL: R38 I12 J13 L83
    Date: 2020–05
  10. By: Salas-Ortiz, A.;
    Abstract: Mexico faces one of the most acute obesity crises worldwide. While most of the literature has focused on studying the immediate causes of the phenomenon, very few have gone further to explore the structural causes of the public health problem, such as inequality of opportunity (IOp). The research agenda after the canonical work of John Roemer acknowledges that not all inequalities are equally illegitimate or unfair. The essence of the concept of inequality of opportunity relies on identifying the sources behind the variation of an outcome. Equality of opportunity is defined as a situation where individuals face equal circumstances (exogenous factors in which people do not have any control and therefore, cannot be held responsible for)for an outcome. This study aims to measure, identify and characterise the dynamics of the role of IOp in body mass index (BMI) and waist circumference (WC) for Mexican adults. Results show that inequalities in BMI and WC related to circumstances exist and vary between sex, geographical regions and percentiles of the distribution. Age and diabetes inherited from the parents are the main drivers of inequality. These findings highlight the need to design differentiated health policies that provide equality of opportunity; mitigate unequal circumstances of origin and compensate people for inherited unequal playing fields.
    Keywords: inequality of opportunity in health; distributive justice; inequality related to circumstances; overweight and obesity; Mexico;
    Date: 2020–02
  11. By: Michah W. Rothbart (Center for Policy Research, Maxwell School, Syracuse University, 426 Eggers Hall, Syracuse, NY 13244); Amy Ellen Schwartz (Center for Policy Research, Maxwell School of Citizenship and Public Affairs, Syracuse University); Emily Gutierrez (Center for Policy Research, Maxwell School of Citizenship and Public Affairs, Syracuse University)
    Abstract: The Community Eligibility Provision (CEP) of the Healthy, Hunger-Free Kids Act of 2010 allows school districts to provide free meals to all students if more than 40 percent of students are individually eligible for free or reduced-price lunch. While emerging evidence documents positive effects on student behavior and academics (Gordon and Ruffini, 2019; Schwartz and Rothbart, 2020), critics worry that Universal Free Meals (UFM) has unintended consequences, including exacerbating student obesity and adding financial burden onto school districts. We use school and district level data from New York State (NYS) and a difference-in-differences design to test whether concerns over negative effects for district finances (both revenues and expenditures) and student weight are justified. We exploit the staggered adoption of CEP across NYS school districts, and explore differences between metro, town, and rural districts. We delve into potential mechanisms, such as lunch and breakfast participation, and use a non-parametric event study model to assess pre-adoption trends and dosage effects. We find that, while local food service revenues decline, as expected, Federal dollars more than compensate through increased reimbursement revenues. Districts increase total food expenditures after CEP adoption (consistent with serving more meals) but spend less per meal. Indeed, while some worry that expanding free meals will crowd out education spending, we find CEP has no effect on instructional expenditures. Furthermore, while CEP increases participation in school lunch and breakfast, there is no deleterious effect on obesity, but, instead, some evidence of decreases in obesity in secondary grades. Rural districts experience larger impacts on revenues, expenditures, and student obesity than both metro and town districts, suggesting rural locations might be the most responsive to CEP. Unlike other districts, however, rural districts experience a food service funding gap from the CEP.
    Keywords: School Food, Childhood Obesity, Free Lunch, School Finance
    JEL: I24 I38 H52
    Date: 2020–04
  12. By: Beth Ann Griffin; Megan S. Schuler; Elizabeth A. Stuart; Stephen Patrick; Elizabeth McNeer; Rosanna Smart; David Powell; Bradley Stein; Terry Schell; Rosalie Liccardo Pacula
    Abstract: Over the last two decades, there has been a surge of opioid-related overdose deaths resulting in a myriad of state policy responses. Researchers have evaluated the effectiveness of such policies using a wide-range of statistical models, each of which requires multiple design choices that can influence the accuracy and precision of the estimated policy effects. This simulation study used real-world data to compare model performance across a range of important statistical constructs to better understand which methods are appropriate for measuring the impacts of state-level opioid policies on opioid-related mortality. Our findings show that many commonly-used methods have very low statistical power to detect a significant policy effect (
    JEL: C1 C12 C15 C18 C22 C23 C4 C52 C54 H0 H51 H7 I18 I28 K32
    Date: 2020–04
  13. By: Nishimura, Y.;; Oikawa, M.;
    Abstract: This study analyzes the relation between the labor force participation of caregivers and the provision of informal in-home elderly care. In Japan, the national government both regulates the market entry of nursing home suppliers and intervenes in the supply side of the eldercare market. Using exogenous variations in this supply side intervention, our analysis finds that the Japanese policy of expanding nursing homes has increased the labor force participation of female workers with low opportunity costs in the labor market while simultaneously reducing their provision of informal care. As the per capita expense of nursing home care is higher than the wage income of most non-regular female workers who tend to provide the bulk of informal in-home care, one may reasonably conclude that the capacity of public nursing homes in Japan has expanded excessively, putting unnecessary pressure both on the Japanese budget and the personal provision of eldercare services.
    Keywords: long-term care insurance system; labor supply; medical expenditure; regulation;
    JEL: H51 I18 J14 J18 J22
    Date: 2020–02
  14. By: Benjamin Ly Serena (CEBI, Department of Economics, University of Copenhagen)
    Abstract: Over the past three decades, many countries have introduced iodized salt policies to eradicate iodine deficiency. While it is well known that iodine deficiency in utero is detrimental to cognitive ability, little is known about the consequences of iodine deficiencies after birth. This paper examines the impact of iodine deficiency in adolescence on cognitive performance. I identify the causal effect of iodine deficiency quasi-experimentally using the introduction of iodized salt in Denmark. Denmark went from a ban on iodized salt before 1998 to a mandate after 2001, making it an ideal national experiment. Combining administrative records on high school grades over a thirty-year period with geographic variation in initial iodine deficiency, I find that salt iodization increases the Grade Point Averages of high school students by 6-9 percent of a standard deviation. This improvement is comparable to the benefits of more standard school achievement policies and at much lower costs.
    Keywords: Iodine Deficiency, Iodized Salt, Nutrition, Human Capital, Health
    JEL: I15 I18 J24
    Date: 2019–06–25
  15. By: Jonas Lau-Jensen Hirani (The Danish Center for Social Science Research (VIVE)); Hans Henrik Sievertsen (The Danish Center for Social Science Research (VIVE)); Miriam W�st (Goethe University, Frankfurt); Johannes Wohlfart (CEBI, Department of Economics, University of Copenhagen)
    Abstract: What is the impact of timing of early-life investment policies on child and maternal health? Exploiting variation from a 2008 Danish nurse strike, we study this question in the context of universal nurse home visiting. We show that early but not later strike exposure increases child (and mother) general practitioner contacts in the first four years after childbirth. Mothers, who forgo an early nurse visit (rather than a later one), have a higher probability of mental health specialist contacts in the first two years after childbirth. We highlight two channels for these results, screening and information provision: We show that nurses perform well in identifying maternal mental health risks during early home visits in control years (likely preventing longer-term problems). Finally, we show that first-born children and children of parents without a health-related education drive our results. A stylized calculation confirms that shortrun health benefits from early universal home visiting outweigh costs.
    Keywords: Early-life health, early interventions, nurse home visiting, parental investments
    JEL: I11 I12 I14 I18 I21
    Date: 2020–03–23
  16. By: Davillas, Apostolos; Pudney, Stephen
    Abstract: Using longitudinal data from a representative UK panel, we focus on a group of apparently healthy individuals with no history of disability or major chronic health condition at baseline. A latent variable structural equation model is used to analyse the predictive role of latent baseline biological health, indicated by a rich set of biomarkers, and other personal characteristics, in determining the individual’s disability state and health service utilisation five years later. We find that baseline health affects future health service utilisation very strongly, via functional disability as a mediating outcome. Our model reveals that observed income inequality in the access to health care, is driven by the fact that higher-income people tend to make greater use of healthcare treatment, for any given health and disability status. This leads to a slight rise in utilisation with income, despite the lower average need for treatment shown by the negative income gradients for both baseline health and disability outcomes. Factor loadings for latent baseline health show that a broader set of blood-based biomarkers, rather than the current focus mainly on blood pressure, cholesterol and adiposity, may need to be considered for public health screening programs.
    Keywords: Health Services,Healthcare Demand,Biomarkers,Disability
    JEL: C3 C8 I10 I18
    Date: 2020
  17. By: Gupta, Aashish
    Abstract: Investigating seasonal variation in health and mortality helps understand disease dynamics and environmental health exposures. Using four available rounds of India's Demographic and Health Surveys (DHS), this paper examines seasonality in infant mortality in India. I use information on the birth month-year, survival status within the first year of life, and age (in months) at death (if the infant died) of more than 330,000 children born between 1989 and 2014 to estimate period mortality rates between ages 0 and 1 for each calendar month. Relative to the spring months, infant mortality is higher in the summer, monsoon, and winter months. If the mortality conditions in the spring months were prevalent throughout the year, would have been less by 10.8 deaths per 1,000 infant alive per year in early 1990s and 4.1 deaths per 1,000 per year in the mid-2010s. Seasonal variation in infant mortality is higher among children born in less wealthy households, among children of less educated mothers, in rural areas, and in poorer regions. Although seasonality in infant mortality has attenuated over-time, seasonal variation in the early-childhood disease environment remains a concern, particularly in rural areas. These results highlight the multiple environmental health threats that infants in India face, and the limited period within a year when these threats are less salient.
    Date: 2020–04–16
  18. By: Juranek, Steffen (Dept. of Business and Management Science, Norwegian School of Economics); Zoutman, Floris T. (Dept. of Business and Management Science, Norwegian School of Economics)
    Abstract: Understanding the effectiveness of social distancing on the spread of COVID-19 is crucial to justify economically costly social distancing measures. We present a case study focusing on the three Scandinavian countries. Whereas Denmark and Norway imposed relatively strict measures, Sweden follows an extraordinarily lenient approach. We use an event-study approach in which Sweden serves as a counterfactual to Denmark/Norway to estimate the measures’ effectiveness. We estimate that in the counterfactual in which Denmark/Norway implemented Sweden’s more lenient measures the number of hospitalizations would have peaked between around 15-20 days later. The peak number of hospitalizations in Denmark (Norway) would have been 133 (231) percent higher, and the peak number of ICU patients would have increased by 107 (140) percent.
    Keywords: COVID-19; Social Distancing; Intensive Care; Case Study
    JEL: H12 I12 I18
    Date: 2020–04–29
  19. By: Baskozos, Giorgos (University of Oxford); Galanis, Giorgos (Goldsmiths, University of London, Centre for Applied Macroeconomic Analysis, Australian National University ; and CRETA, University of Warwick); Di Guilmi, Corrado (University of Technology Sydney, Australia; and Centre for Applied Macroeconomic Analysis, Australian National University)
    Abstract: We present an epidemic model in which heterogenous agents choose whether to enact social distancing practices. The policy maker decides on the timing and the extent of policies that incentivise social distancing. We evaluate the consequences of interventions and find that: (i) the timing of intervention is paramount in slowing the contagion, and (ii) a delay cannot be compensated by stronger measures.
    Date: 2020
  20. By: Andrew Glover; Jonathan Heathcote; Dirk Krueger; José-Víctor Ríos-Rull
    Abstract: To slow the spread of COVID-19, many countries are shutting down non-essential sectors of the economy. Older individuals have the most to gain from slowing virus diffusion. Younger workers in sectors that are shuttered have the most to lose. In this paper, we build a model in which economic activity and disease progression are jointly determined. Individuals differ by age (young and retired), by sector (basic and luxury), and by health status. Disease transmission occurs in the workplace, in consumption activities, at home, and in hospitals. We study the optimal economic mitigation policy of a utilitarian government that can redistribute across individuals, but where such redistribution is costly. We show that optimal redistribution and mitigation policies interact, and reflect a compromise between the strongly diverging preferred policy paths of different subgroups of the population. We find that the shutdown in place on April 12 is too extensive, but that a partial shutdown should remain in place through July.
    JEL: E20 E30
    Date: 2020–04
  21. By: Matthew D. Lang (Department of Economics, University of California Riverside); Bree J. Lang (Department of Economics, University of California Riverside)
    Abstract: A record 3.7 million firearm background checks were completed in March, 2020, the month that the United States began responding to the COVID-19 pandemic. Using monthly state-level data, we show that the pandemic is associated with a 40 percent increase in the firearm background check rate. The COVID-19 effect is significantly greater than the increases in firearm sales associated with gun-buying events in the past, including the election of Barack Obama in 2008 and the Sandy Hook Elementary school shooting. During the COVID-19 pandemic, the increase in background checks in Republican-leaning states is statistically indistinguishable from the increase in Democrat-leaning states. The only other event that we explore where all states across the political spectrum react similarly in terms of firearm sales is following the 9-11 terrorist attacks. However, the magnitude of the increase in firearm background checks during the COVID-19 pandemic is approximately twice as large as the terrorist attacks. Our findings are relevant to public health officials concerned about the combination of more firearms and deteriorating mental health during the COVID-19 outbreak. At the same time, the non-partisan response in firearm purchases during the pandemic suggests that the divide between political parties may not be as wide as previously thought.
    Keywords: COVID-19, firearm background checks, gun policy
    JEL: H75 I18
    Date: 2020–05
  22. By: Adriano A. Rampini
    Abstract: This paper analyzes a sequential approach to lifting interventions in the COVID-19 pandemic taking heterogeneity in the population into account. The population is heterogeneous in terms of the consequences of infection (need for hospitalization and critical care, and mortality) and in terms of labor force participation. Splitting the population in two groups by age, a less affected younger group that is more likely to work, and a more affected older group less likely to work, and lifting interventions sequentially (for the younger group first and the older group later on) can substantially reduce mortality, demands on the health care system, and the economic cost of interventions.
    JEL: E32 E44 E65 H12 I10 I18
    Date: 2020–04
  23. By: Chowdhry, Sonali; Jacobs, Anna-Katharina; Kamin, Katrin
    Abstract: Iran is one of the countries most affected by COVID-19 worldwide and is considered the epicenter of the outbreak in the Middle East. The growing number of cases in combination with the already ailing economy is putting increasing pressure on the Iranian healthcare system. The delayed reaction of the Iranian government to the outbreak of the pandemic and the low level of political confidence of the population in politics aggravate the crisis situation. In their contribution, the authors show that the far-reaching sanctions Iran has been subject to since the US withdrew from the nuclear agreement make it difficult for the health care system to react quickly to COVID-19. The authors recommend that the European Union, in its role as a responsible "global player", ensure the transfer of medical equipment for humanitarian purposes to Iran and strengthen cooperation efforts in the wake of the pandemic at the level of multilateral institutions. The EU should also play an active role in maintaining the dialogue between the USA and Iran.
    Keywords: COVID-19,Iran,Sanctions,Trade Policy,Sanktionen,Handelspolitik
    Date: 2020
  24. By: Anish Agarwal; Abdullah Alomar; Arnab Sarker; Devavrat Shah; Dennis Shen; Cindy Yang
    Abstract: As we reach the apex of the COVID-19 pandemic, the most pressing question facing us is: can we even partially reopen the economy without risking a second wave? Towards this, we need to understand if shutting down the economy helped. And if it did, is it possible to achieve similar gains in the war against the pandemic while partially opening up the economy? To do so, it is critical to understand the effects of the various interventions that can be put into place and their corresponding health and economic implications. Since many interventions exist, the key challenge facing policy makers is understanding the potential trade-offs between them, and choosing the particular set of interventions that works best for their circumstance. In this memo, we provide an overview of Synthetic Interventions (a natural generalization of Synthetic Control), a data-driven and statistically principled method to perform what-if scenario planning, i.e., for policy makers to understand the trade-offs between different interventions before having to actually enact them. In essence, the method leverages information from different interventions that have already been enacted across the world and fits it to a policy maker's setting of interest, e.g., to estimate the effect of mobility-restricting interventions on the U.S., we use daily death data from countries that enforced severe mobility restrictions to create a "synthetic low mobility U.S." and predict the counterfactual trajectory of the U.S. if it had indeed applied a similar intervention. Using Synthetic Interventions, we find that lifting severe mobility restrictions and only retaining moderate mobility restrictions (at retail and transit locations), seems to effectively flatten the curve. We hope provides guidance on weighing the trade-offs between the safety of the population, strain on the healthcare system, and impact on the economy.
    Date: 2020–04
  25. By: Eric Kemp-Benedict (Stockholm Environment Institute (SE))
    Abstract: The economic impact of public health measures to contain the COVID-19 novel coronavirus is a matter of contentious debate. Given the high uncertainties, there is a need for combined epidemiological-macroeconomic scenarios. We present a model in this paper for developing such scenarios. The epidemiological sub-model is a discrete-time matrix implementation of an SEIR model. This approach avoids known problems with the more usual set of continuous-time differential equations. The post-Keynesian macroeconomic sub-model is a stylized representation of the United States economy with three sectors: core, social (most impacted by social distancing), and hospital, which may experience excessive demand. Simulations with the model show the clear superiority of a rigorous testing and contact tracing regime in which infected individuals, symptomatic or not, are isolated. Social distancing leads to an abrupt and deep recession. With expanded unemployment benefits, the drop is shallower. When testing and contact tracing is introduced, social spending can be scaled back and the economy recovers quickly. Ending social distancing without a testing and tracing regime leads to a high death toll and severe economic impacts. Results suggest that social distancing and fiscal stimulus have had their desired effects of reducing the health and economic impacts of the disease.
    Keywords: SARS-CoV-2; coronavirus; COVID-19; macroeconomy; post-Keynesian; SEIR model
    JEL: E00 E11 I18
    Date: 2020–05
  26. By: Krishna Dasaratha
    Abstract: Motivated by epidemics such as COVID-19, we study the spread of a contagious disease when people change their behavior to respond to the disease prevalence. We extend the SIR epidemiological model to include endogenous meeting rates. Individuals benefit from economic activity, but higher activity also leads to more interactions with potentially infected individuals. The main focus is a theoretical analysis of the contagion dynamics. In the leading case, the infection prevalence is single-peaked. We obtain a simple condition for when several types of public-health interventions or changes in disease prevalence will paradoxically increase infection rates due to risk compensation. This condition implies that public-health interventions are most likely to be undermined by increased economic activity near the peak of severe diseases.
    Date: 2020–04
  27. By: Casey B. Mulligan
    Abstract: The “shutdown” economy of April 2020 is compared to a normally functioning economy both in terms of market and nonmarket activities. Three novel methods and data indicate that the shutdown puts market production 25-28 percent below normal in the short run. At an annual rate, the shutdown is costing $7 trillion, or about $15,000 per household per quarter. Employment already fell 28 million by early April 2020. These costs indicate, among other things, the value of innovation in both health and general business sectors that can accelerate the time when normal activity resumes.
    JEL: E01 I18 O31
    Date: 2020–04
  28. By: Azim, Syeda Saadia; roy, arindam; Aich, Amitava; Dey, Dipayan
    Abstract: The increasing trend of environmental disaster due to changing climate has escalated the occurrence of Tsunami, Forest fire, Flood, Epidemics and other extreme health and environmental and hazardous events across the globe. Establishment of effective and transparent communication during the crisis phase is extremely important to reduce the after-effects of the events. In recent times, fake news or news with fabricated content have emerged as major threats of communications during and and post -disaster phase. The present study critically evaluates the nature and consequences of fake news spread during the four major environmental disasters in recent era (Fukushima Nuclear Disaster, Keralan Flood, Amazon Forest Fire and African Ebola Epidemic) and prepared a framework for present COVID-19 Pandemic. The criticality and potential threat created by the fake news have been quantified and analyzed through the timeline of news spreading. It has been observed that the adverse impact related to the African Ebola Epidemic was highest due to its multiple fake news origin sites, both online and offline propagation methods, well fabricated content and relatively low effort on containment. However the COVID-19 pandemic is an ongoing disaster expected to have a long- drawn impact covering most countries in the world with combined consequences hence it tends to overtake all other events. Policy recommendations have been prepared to combat the spreading of fake news during the present and future environmental disasters. The importance of the study relies on the fact that the number of environmental disasters will increase in future and strategy for risk communication during the time is still not explored adequately. In addition the study will contribute significantly for understanding the present status of information paradigm for COVID-19 and helps in preparing region-specific real-time contingency measures for effective risk communication.
    Date: 2020–04–21
  29. By: Martín Gonzalez-Eiras; Dirk Niepelt
    Abstract: We embed a lockdown choice in a simplified epidemiological model and derive formulas for the optimal lockdown intensity and duration. The optimal policy reflects the rate of time preference, epidemiological factors, the hazard rate of vaccine discovery, learning effects in the health care sector, and the severity of output losses due to a lockdown. In our baseline specification a Covid-19 shock as currently experienced by the US optimally triggers a reduction in economic activity by two thirds, for about 50 days, or approximately 9:5 percent of annual GDP.
    Keywords: epidemic, pandemic, lockdown, social distancing, production shortfall, health care system, Covid-19, SIR model, logistic model
    JEL: I18
    Date: 2020
  30. By: Fève, Patrick; Assenza, Tiziana; Collard, Fabrice; Dupaigne, Martial; Hellwig, Christian; Kankanamge, Sumudu; Werquin, Nicolas
    Abstract: We develop a comprehensive framework for analyzing optimal economic policy during a pandemic crisis in a dynamic economic model that trades off pandemic-induced mortality costs against the adverse economic impact of policy interventions. We use the comparison between the planner problem and the dynamic decentralized equilibrium to highlight the margins of policy intervention and describe optimal policy actions. As our main conclusion, we provide a strong and novel economic justification for the current approach to dealing with the pandemic, which is different from the existing health policy rationales. This justification is based on a simple economic concept, the shadow price of infection risks, which succinctly captures the static and dynamic trade-offs and externalities between economic prosperity and mortality risk as the pandemic unfolds.
    Date: 2020–05
  31. By: Carmen Herrero Blanco (Ivie (Instituto Valenciano de Investigaciones Económicas)); Antonio Villar Notario (Ivie (Instituto Valenciano de Investigaciones Económicas))
    Abstract: We present in this paper an indicator that approaches the impact of COVID-19 on the community’s health, at this early stage of the pandemic. It consists of the product of the extent (ratio of those affected over the population) and a measure of severity (the intensity of the disease on those affected). We concentrate on the population of those seriously affected by the illness, rather than those infected, given the available data. The severity measure derives from the application of an evaluation protocol that allows comparing population distributions based on the proportions of those affected with different health conditions (the balanced worth, developed by Herrero & Villar (2013, 2018)). We illustrate the functioning of this indicator over a case study regarding the situation of the Italian regions on March 9 (the beginning of the confinement) and April 8th, 2020, one month later.
    Keywords: Covid-19; community’s health; impact; severity; Italian regions
    JEL: C18 I11
    Date: 2020–04
  32. By: Joshua R. Goldstein; Ronald D. Lee
    Abstract: What would a hypothetical one million US deaths in the Covid-19 epidemic mean for mortality of individuals at the population level? To put estimates of Covid-19 mortality into perspective, we estimate age-specific mortality for an epidemic claiming for illustrative purposes one million US lives, with results scalable over a broad range of deaths. We calculate the impact on period life expectancy (down 3 years) and remaining life-years (12.3 years per death), which for one million deaths can be valued at six to 10 trillion dollars. The age-patterns of Covid-19 mortality observed in other countries are remarkably similar and exhibit the typical rate of increase by age of normal mortality. The scenario of one million Covid-19 deaths is similar in scale to the decades-long HIV/AIDS and opioid-overdose epidemics but considerably smaller than the Spanish Flu of 1918. Unlike HIV/AIDS and opioid epidemics, the Covid-19 deaths will be concentrated in months rather than spread out over decades.
    JEL: J1 J10 J11
    Date: 2020–04
  33. By: Quaas, Georg
    Abstract: The German Robert Koch Institute aims to "protect the population from disease and improve their state of health" (RKI 2017). To this end, it develops concrete, research-based recommendations for policymakers and makes data available to the expert public. Since March 4, 2020, it has been publishing the numbers of coronavirus infections reported by health authorities daily; since March 9, these data have included the numbers of people who have died of COVID-19; and since March 25, the RKI has reported the estimated numbers of those who have recovered. The important reproduction number, reported daily since April 7, has now largely replaced all other criteria used for decision-making. This paper aims to show that the calculation of this figure is neither theory-based nor particularly reliable. Nevertheless, there is a simple way to determine its change more or less conservatively and precisely.
    Keywords: Classic epidemic model,reproduction number,contact rate,COVID-19,mathematics of highly infectious diseases,public health
    JEL: C32 C61 I12 I18 J11
    Date: 2020

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