nep-hea New Economics Papers
on Health Economics
Issue of 2020‒05‒25
38 papers chosen by
Nicolas R. Ziebarth
Cornell University

  1. Expected Profits and The Scientific Novelty of Innovation By David Dranove; Craig Garthwaite; Manuel I. Hermosilla
  2. Are doctors better health ministers? By Pilny, Adam; Rösel, Felix
  3. Publication Bias and Editorial Statement on Negative Findings By Cristina Blanco-Perez; Abel Brodeur
  4. Biased Health Perceptions and Risky Health Behaviors: Theory and Evidence By Patrick Arni; Davide Dragone; Lorenz Goette; Nicolas R. Ziebarth
  5. The Effect of Changes in Alcohol Tax Differentials on Alcohol Consumption By Markus Gehrsitz; Henry Saffer; Michael Grossman
  6. Office Visits Preventing Emergency Room Visits: Evidence From the Flint Water Switch By Shooshan Danagoulian; Daniel S. Grossman; David Slusky
  7. Competition in public service provision: the role of not-for-profit providers By Besley, Timothy; Malcomson, James M.
  8. Reassessing private practice in public hospitals in Ireland: An overview of OECD experiences By Karolina Socha-Dietrich; Michael Mueller
  9. Hospital responses to the introduction of reimbursements by treatment intensity in a (presumably lump sum) DRG system By Bäuml, Matthias; Kümpel, Christian
  10. Weather shocks and child nutrition: Evidence from Tanzania By Aimable Nsabimana; Justice Tei Mensah
  11. Incentivizing Behavioral Change: The Role of Time Preferences By Shilpa Aggarwal; Rebecca Dizon-Ross; Ariel D. Zucker
  12. Hands on the Wheel, Eyes on the Phone: the Effect of Smart Phone Usage on Road Safety By Devi Brands; Joris Klingen; Francis Ostermeijer
  13. Sleep restriction increases coordination failure By Marco Castillo; David L. Dickinson
  14. Study of the Distributional Performance of Piped Water Consumption Subsidies in 10 Developing Countries By Abramovsky,Laura Fernanda; Andres,Luis Alberto; Joseph,George; Rud,Juan Pablo; Sember,German Eduardo; Thibert,Michael David
  15. Mercury-related health benefits from retrofitting coal-fired power plants in China By Jiashuo Li; Sili Zhou; Wendong Wei; Jianchuan Qi; Yumeng Li; Bin Chen; Ning Zhang; Dabo Guan; Haoqi Qian; Xiaohui Wu; Jiawen Miao; Long Chen; Sai Liang; Kuishuang Feng
  16. Early-Life Access to a Basic Health Care Program and Adult Outcomes in Indonesia By Ahsan,Md Nazmul; Banerjee,Rakesh; Maharaj,Riddhi
  17. Nowcasting Economic Activity in Times of COVID-19 : An Approximation from the Google Community Mobility Report By Sampi Bravo,James Robert Ezequiel; Jooste,Charl
  18. Prosociality predicts health behaviors during the COVID-19 pandemic By Pol Campos-Mercade; Armando N. Meier; Florian H. Schneider; Erik Wengström
  19. A Note on Long-Run Persistence of Public Health Outcomes in Pandemics By Peter Zhixian Lin; Christopher M. Meissner
  20. The Impact of the Coronavirus Lockdown on Mental Health: Evidence from the US By Abi Adams-Prassl; Teodora Boneva; Marta Golin; Christopher Rauh
  21. Trust in science and experts during the COVID-19 outbreak in Italy By Battiston, Pietro; Kashyap, Ridhi; Rotondi, Valentina
  22. Causal mediation analysis with double machine learning By Farbmacher, Helmut; Huber, Martin; Langen, Henrika; Spindler, Martin
  23. The Macroeconomics of Testing and Quarantining By Martin S. Eichenbaum; Sergio Rebelo; Mathias Trabandt
  24. Estimating and Simulating a SIRD Model of COVID-19 for Many Countries, States, and Cities By Jesús Fernández-Villaverde; Charles I. Jones
  25. Optimal Trade-Off Between Economic Activity and Health During an Epidemic By Tommy Andersson; Albin Erlanson; Daniel Spiro; Robert \"Ostling
  26. When to release the lockdown: a wellbeing framework for analysing costs and benefits By Layard, Richard; Clark, Andrew E.; De Neve, Jan-Emmanuel; Krekel, Christian; Fancourt, Daisy; Hey, Nancy; O'Donnell, Gus
  27. When Do Shelter-in-Place Orders Fight COVID-19 Best? Policy Heterogeneity Across States and Adoption Time By Dhaval M. Dave; Andrew I. Friedson; Kyutaro Matsuzawa; Joseph J. Sabia
  28. Are the COVID19 restrictions really worth the cost? A comparison of estimated mortality in Australia from COVID19 and economic recession By Neil W Bailey; Daniel West
  29. Does the BCG Vaccine Protect Against Coronavirus? Applying an Economist’s Toolkit to a Medical Question By Richard Bluhm; Maxim L. Pinkovskiy
  30. Optimal Management of an Epidemic: Lockdown, Vaccine and Value of Life By Carlos Garriga; Rody Manuelli; Siddhartha Sanghi
  31. Global Behaviors and Perceptions at the Onset of the COVID-19 Pandemic By Thiemo R. Fetzer; Marc Witte; Lukas Hensel; Jon Jachimowicz; Johannes Haushofer; Andriy Ivchenko; Stefano Caria; Elena Reutskaja; Christopher P. Roth; Stefano Fiorin; Margarita Gómez; Gordon Kraft-Todd; Friedrich M. Götz; Erez Yoeli
  32. Global Behaviors and Perceptions at the Onset of the COVID-19 Pandemic By Fetzer, Thiemo; Witte, Marc; Hense, Lukas; Jachimowicz, Jon M.; Haushofer, Johannes; Ivchenko, Andriy; Cariam Stefano; Reutskaja, Elena; Roth, Christopher; Fiorin, Stefano; Gomez, Margarita; Kraft-Todd, Gordon; Goetz, Friedrich M.; Yoeli, Erez
  33. Group testing against Covid-19 By Christian Gollier; Olivier Gossner
  34. Promoting social distancing in a pandemic: Beyond the good intentions By Falco, Paolo; Zaccagni, Sarah
  35. COVID-19 and the Welfare Effects of Reducing Contagion By Robert S. Pindyck
  36. The Effect of Social Distancing Measures on the Demand for Intensive Care: Evidence on COVID-19 in Scandinavia By Steffen Juranek; Floris Zoutman
  37. Life Dissatisfaction and Anxiety in COVID-19 pandemic By de Pedraza, Pablo; Guzi, Martin; Tijdens, Kea
  38. Determinants of Social Distancing and Economic Activity during COVID-19 : A Global View By Maloney,William F.; Taskin,Temel

  1. By: David Dranove; Craig Garthwaite; Manuel I. Hermosilla
    Abstract: Innovation policy involves trading off monopoly output and pricing in the short run in exchange for incentives for firms to develop new products in the future. While existing research demonstrates that expected profits fuel R&D investments, little is known about the novelty of the projects funded by these investments. Relying on data that describe the scientific approaches used by a large sample of experimental drug projects, we expand on this literature by examining the scientific novelty of pharmaceutical R&D investments following the creation of the Medicare Part D program. We find little evidence that the positive demand shock implied by this program prompted firms to undertake scientifically novel R&D activity, as measured by whether the specific scientific approach had been used before. However, we find some evidence that firms invested in products involving novel combinations of scientific approaches. These estimates can inform economists and policymakers assessing the tradeoffs associated with marginal changes in commercial returns from newly developed pharmaceutical products.
    JEL: I1 O3
    Date: 2020–05
  2. By: Pilny, Adam; Rösel, Felix
    Abstract: Appointing or electing professionals to be public officials is a double-edged sword. Experts can use their rich knowledge to implement reforms, but they can also favor their own profession. In this study, we compare physician-trained state health ministers to ministers of other professions in Germany during 1955-2017. German state health ministers have great power to determine hospital capacities and infrastructure. Our results show that physician-trained health ministers increase hospital capacities, capital, and funding by the statutory health insurance (SHI). This prompts hospitals to hire more physicians, but with little impact on hospital outputs. As a result, total factor productivity (TFP) growth in hospital care slows down substantially under physician-ministers. At the same time, job satisfaction of hospital doctors tends to increase. We conclude that, in particular, the medical profession benefits from medical doctors in office.
    Keywords: Hospitals,health minister,productivity,TFP,favoritism,profession,technocracy
    JEL: D72 I11 I18 O47 P16
    Date: 2020
  3. By: Cristina Blanco-Perez; Abel Brodeur
    Abstract: In February 2015, the editors of eight health economics journals sent out an editorial statement which aims to reduce the extent of specification searching and reminds referees to accept studies that: "have potential scientific and publication merit regardless of whether such studies' empirical findings do or do not reject null hypotheses". Guided by a pre-analysis, we test whether the editorial statement decreased the extent of publication bias. Our differences-in-differences estimates suggest that the statement decreased the proportion of tests rejecting the null hypothesis by 18 percentage points. Our findings suggest that incentives may be aligned to promote more transparent research.
    Keywords: publication bias, specification searching, pre-analysis plan, research in economics, incentives to publish
    JEL: A11 C13 C44 I10
    Date: 2019–08
  4. By: Patrick Arni; Davide Dragone; Lorenz Goette; Nicolas R. Ziebarth
    Abstract: This paper investigates the role of biased health perceptions as driving forces of risky health behavior. We define absolute and relative health perception biases, illustrate their measurement in surveys and provide evidence on their relevance. Next, we decompose the theoretical effect into its extensive and intensive margin: when the extensive margin dominates, people (wrongly) believe they are healthy enough to “afford” unhealthy behavior. Finally, using three population surveys, we provide robust empirical evidence that respondents who overestimate their health are less likely to exercise and sleep enough, but more likely to eat unhealthily and drink alcohol daily.
    JEL: C93 D03 D83 I12
    Date: 2020–04
  5. By: Markus Gehrsitz; Henry Saffer; Michael Grossman
    Abstract: We show that tax-induced increases in alcohol prices can lead to substantial substitution and avoidance behavior that limits reductions in alcohol consumption. Causal estimates are derived from a natural experiment in Illinois where spirits and wine taxes were raised sharply and unexpectedly in 2009. Beer taxes were increased by only a trivial amount. We construct representative and consistent measures of alcohol prices and sales from scanner data collected for hundreds of products in several thousand stores across the US. Using several differences-in-differences models, we show that alcohol excise taxes are instantly over-shifted by a factor of up to 1.5. Consumers react by switching to less expensive products and increase purchases of low-tax alcoholic beverages, thus all but offsetting any moderate, tax-induced reductions in total ethanol consumption. Our study highlights the importance of tax-induced substitution, the implications of differential tax increases by beverage group and the impacts on public health of alternative types of tax hikes whose main aims are to increase revenue.
    JEL: I12 I18
    Date: 2020–05
  6. By: Shooshan Danagoulian; Daniel S. Grossman; David Slusky
    Abstract: Emergency department visits are costly to providers and to patients. We use the Flint water crisis to test if an increase in office visits reduced avoidable emergency room visits. In September 2015, the city of Flint issued a lead advisory to its residents, alerting them of increased lead levels in their drinking water, resulting from the switch in water source from Lake Huron to the Flint River. Using Medicaid claims for 2013-2016, we find that this information shock increased the share of enrollees who had lead tests performed by 1.7 percentage points. Additionally, it increased office visits immediately following the information shock and led to a reduction of 4.9 preventable, non-emergent, and primary-care-treatable emergency room visits per 1000 eligible children (8.2%). This decrease is present in shifts from emergency room visits to office visits across several common conditions. Our analysis suggest that children were more likely to receive care from the same clinic following lead tests and that establishing care reduced the likelihood parents would take their children to emergency rooms for conditions treatable in an office setting. Our results are potentially applicable to any situation in which individuals are induced to seek more care in an office visit setting.
    JEL: H75 I12 I18 J13 Q53 Q58
    Date: 2020–05
  7. By: Besley, Timothy; Malcomson, James M.
    Abstract: With public services such as health and education, it is not straightforward for consumers to assess the quality of provision. Many such services are provided by monopoly not-for-profit providers and there is concern that for-profit providers may increase profit at the expense of quality. This paper explores the implications of entry by for-profit providers when there is unobserved quality. The model generates three key policy-relevant insights. First, by developing a novel approach to competition between different organizational forms, it frames the relevant trade-offs precisely. Second, it shows the value of keeping an incumbent not-for-profit as an active provider. Third, it characterizes the optimal payment (or voucher value) to an entrant for each consumer who switches in a way that can be applied empirically.
    Keywords: Public services; Competition; Not-for-profit providers
    JEL: H11 H44 L21 L31
    Date: 2018–06–01
  8. By: Karolina Socha-Dietrich (OECD); Michael Mueller (OECD)
    Abstract: In 2017, the “Sláintecare Report” proposed a comprehensive overhaul of the Irish health system including a reform proposal to phase out private practice in public hospitals to end the unequal treatment of public and private patients – private patients typically have quicker access to care – and reduce waiting times for public patients. This paper summarises the arguments for and against this practice that were put forward to help inform the subsequent policy debate. The paper compares how private practice is regulated and organised in Ireland with the situation in four other OECD countries – Australia, France, Israel and the United Kingdom - and discusses the costs and benefits of private practice in public hospitals, and highlights potential consequences of a ban on this practice. It also describes the information required when making a decision whether to ban this practice or not. Finally, the paper discusses some alternative policy approaches that could replace or complement a ban of private practice to discontinue the unequal treatment of public and private patients.
    JEL: I13 I11 J45
    Date: 2020–05–20
  9. By: Bäuml, Matthias; Kümpel, Christian
    Abstract: Many OECD countries have replaced per-diem hospital reimbursement with lump sum payments by diagnosis-related groups (DRGs). However, modern DRG systems still allow hospitals to pass on actual treatment costs to payers, which might hinder the efficiency of health care provision. This paper analyzes hospital responses to a large-scale refinement of reimbursement practices in Germany on January 1, 2006, in which regulating authorities introduce reimbursements by treatment intensity in the market for stroke disorder. We find that the share of admissions receiving high-intensity treatment jumps by approximately 7 percentage points around the turn of the year. At the same time, a decrease in the average clinical appropriateness for patients receiving this high-intensity treatment reveals that the marginal high-intensity treated patient in 2006 is less appropriate for high-intensity treatment compared to 2005. We do not find accompanying (short-term) changes in the quality of care, such as decreases in in-hospital mortality. Thus, regulating authorities may improve efficiency by reducing the importance of extra reimbursements for marginal treatments in modern DRG systems.
    Date: 2020
  10. By: Aimable Nsabimana; Justice Tei Mensah
    Abstract: In this paper, we examine the relationship between childhood exposure to adverse weather shocks and nutritional and health outcomes of children in Tanzania. Using household panel data matched with spatially disaggregated data on weather shocks, we exploit the plausibly exogenous variations in the exposure to weather shocks to estimate the relationship. Our results reveal a positive association between exposure to dry weather shocks and stunting among children. The effects are profound in the first 12 months after childbirth.
    Keywords: Child nutrition, Tanzania, Weather shock
    Date: 2020
  11. By: Shilpa Aggarwal; Rebecca Dizon-Ross; Ariel D. Zucker
    Abstract: How should the design of incentives vary with agent time preferences? We develop two predictions. First, “bundling” the payment function over time – specifically by making the payment for future effort increase in current effort – is more effective if individuals are impatient over effort. Second, increasing the frequency of payment is more effective if individuals are impatient over payment. We test the efficacy of time-bundling and payment frequency, and their interactions with impatience, using a randomized evaluation of an incentive program for exercise among diabetics in India. Consistent with our theoretical predictions, bundling payments over time meaningfully increases effort among the impatient relative to the patient. In contrast, increasing payment frequency has limited efficacy, suggesting limited impatience over payments. On average, incentives increase daily steps by 1,266 (13 minutes of brisk walking) and improve health.
    JEL: D9 I12 I15
    Date: 2020–05
  12. By: Devi Brands (Vrije Universiteit Amsterdam); Joris Klingen (Vrije Universiteit Amsterdam); Francis Ostermeijer (Vrije Universiteit Amsterdam)
    Abstract: We provide novel evidence on the effect of smart phone use on road accidents. We exploit variation in phone usage fees in the Netherlands following a change in European Union (EU) roaming regulations implemented in 2017. The growth rate of mobile data roaming increased substantially after the change, which allows us to estimate a difference-in-differences model where non-Dutch drivers from the EU are treated, while Dutch drivers serve as control group. Our results suggest that around 10% of vehicles involved in accidents can be explained by the use of smart phones, and that these accidents mainly happen on urban roads.
    Keywords: road safety, accident risk, smart phones, urban roads
    JEL: K42 R41 I12
    Date: 2020–05–17
  13. By: Marco Castillo; David L. Dickinson
    Abstract: When group outcomes depend on minimal e?ort (e.g., disease containment, work teams, or indigenous hunt success), a classic coordination problem exists. Using a wellestablished paradigm, we examine how a common cognitive state (insu?cient sleep) impacts coordination outcomes. Our data indicate that insu?cient sleep increases coordination failure costs, which suggests that the sleep or, more generally, cognitive composition of a group might determine its ability to escape from a trap of costly miscoordination and wasted cooperative e?orts. These ?ndings are ?rst evidence of the potentially large externality of a commonly experienced biological state (insu?cient sleep) that has in?ltrated many societies. Key Words:
    Date: 2020
  14. By: Abramovsky,Laura Fernanda; Andres,Luis Alberto; Joseph,George; Rud,Juan Pablo; Sember,German Eduardo; Thibert,Michael David
    Abstract: This paper provides new evidence on how effectively piped water consumption subsidies are targeting poor households in 10 low- and middle-income countries around the world. The results suggest that, in these countries, existing tariff structures fall short of recovering the costs of service provision, and the resulting subsidies largely fail to achieve their goal of improving the accessibility and affordability of piped water for poor households. Instead, the majority of subsidies in all 10 countries are captured by the richest households. This is in part because the most vulnerable population segments typically face challenges in accessing and connecting to piped water services. The paper also reveals shortcomings in the design of the subsidies, which are conditional on poor households being connected to a piped network.
    Keywords: Hydrology,Labor&Employment Law,Small Private Water Supply Providers,Sanitary Environmental Engineering,Health and Sanitation,Water Supply and Sanitation Economics,Town Water Supply and Sanitation,Engineering,Water and Human Health,Environmental Engineering,Sanitation and Sewerage
    Date: 2020–05–12
  15. By: Jiashuo Li; Sili Zhou; Wendong Wei; Jianchuan Qi; Yumeng Li; Bin Chen; Ning Zhang; Dabo Guan; Haoqi Qian; Xiaohui Wu; Jiawen Miao; Long Chen; Sai Liang; Kuishuang Feng
    Abstract: China has implemented retrofitting measures in coal-fired power plants (CFPPs) to reduce air pollution through small unit shutdown (SUS), the installation of air pollution control devices (APCDs) and power generation efficiency (PGE) improvement. The reductions in highly toxic Hg emissions and their related health impacts by these measures have not been well studied. To refine mitigation options, we evaluated the health benefits of reduced Hg emissions via retrofitting measures during China's 12th Five-Year Plan by combining plant-level Hg emission inventories with the China Hg Risk Source-Tracking Model. We found that the measures reduced Hg emissions by 23.5 tons (approximately 1/5 of that from CFPPs in 2010), preventing 0.0021 points of per-foetus intelligence quotient (IQ) decrements and 114 deaths from fatal heart attacks. These benefits were dominated by CFPP shutdowns and APCD installations. Provincial health benefits were largely attributable to Hg reductions in other regions. We also demonstrated the necessity of considering human health impacts, rather than just Hg emission reductions, in selecting Hg control devices. This study also suggests that Hg control strategies should consider various factors, such as CFPP locations, population densities and trade-offs between reductions of total Hg (THg) and Hg2+.
    Date: 2020–05
  16. By: Ahsan,Md Nazmul; Banerjee,Rakesh; Maharaj,Riddhi
    Abstract: Access to primary care during early life can have substantial benefits in developing countries. This study evaluates the long-run impact of the Village Midwife Program in Indonesia. It utilizes the roll-out-variation of the program and link individual background and community characteristics in early childhood to adult outcomes in the Indonesian Family Life Survey. It finds that the presence of a midwife in a community in utero leads to an improvement in overall health, cognition, and economic outcomes among men, but not for women. Greater receipt of antenatal care and skilled birth-attendance could, in part, drive these results.
    Keywords: Health Care Services Industry,Labor Markets,Reproductive Health,Educational Sciences
    Date: 2020–05–12
  17. By: Sampi Bravo,James Robert Ezequiel; Jooste,Charl
    Abstract: This paper proposes a leading indicator, the"Google Mobility Index,"for nowcasting monthly industrial production growth rates in selected economies in Latin America and the Caribbean. The index is constructed using the Google COVID-19 Community Mobility Report database via a Kalman filter. The Google database is publicly available starting from February 15, 2020. The paper uses a backcasting methodology to increase the historical number of observations and then augments a lag of one week in the mobility data with other high-frequency data (air quality) over January 1, 2019 to April 30, 2020. Finally, mixed data sampling regression is implemented for nowcasting industrial production growth rates. The Google Mobility Index is a good predictor of industrial production. The results suggest a significant decline in output of between 5 and 7 percent for March and April, respectively, while indicating a trough in output in mid-April.
    Keywords: International Trade and Trade Rules,Health Care Services Industry,Pharmaceuticals Industry,ICT Policy and Strategies,ICT Legal and Regulatory Framework,Economic Conditions and Volatility
    Date: 2020–05–14
  18. By: Pol Campos-Mercade; Armando N. Meier; Florian H. Schneider; Erik Wengström
    Abstract: Socially responsible behavior is crucial for slowing the spread of infectious diseases. However, economic and epidemiological models of disease transmission abstract from prosocial motivations as a driver of behaviors that impact the health of others. In an incentivized study, we show that a large majority of people are very reluctant to put others at risk for their personal benefit. Moreover, this experimental measure of prosociality predicts health behaviors during the COVID-19 pandemic, measured in a separate and ostensibly unrelated study with the same people. Prosocial individuals are more likely to follow physical distancing guidelines, stay home when sick, and buy face masks. We also find that prosociality measured two years before the pandemic predicts health behaviors during the pandemic. Our findings indicate that prosociality is a stable, long-term predictor of policy-relevant behaviors, suggesting that the impact of policies on a population may depend on the degree of prosociality.
    Keywords: Social preferences, health behavior, externalities, COVID-19
    JEL: D01 D91 I12 I18
    Date: 2020–05
  19. By: Peter Zhixian Lin; Christopher M. Meissner
    Abstract: Covid-19 is the single largest threat to global public health since the Spanish Influenza pandemic of 1918-20. Was the world better prepared in 2020 than it was in 1918? After a century of public health and basic science research, pandemic response and mortality outcomes should be better than in 1918-20. We ask whether historical mortality from pandemics has any predictive content for mortality in the ongoing Covid-19 pandemic. We find a strong persistence in public health performance in the early days of the Covid-19 pandemic. Places that performed poorly in terms of mortality in 1918 were more likely to have higher mortality today. This is true across countries and across a sample of US cities. Experience with SARS is associated with lower mortality today. Distrust of expert advice, lack of cooperation at many levels, over-confidence, and health care supply shortages have likely promoted higher mortality today as in the past.
    JEL: H12 I0 N0
    Date: 2020–05
  20. By: Abi Adams-Prassl (University of Oxford); Teodora Boneva (University of Zurich); Marta Golin; Christopher Rauh (University of Montreal)
    Abstract: The coronavirus outbreak has caused significant disruptions to people’s lives. We document the impact of state-wide stay-at-home orders on mental health using real time survey data in the US. The lockdown measures lowered mental health by 0.085 standard deviations. This large negative effect is entirely driven by women. As a result of the lockdown measures, the existing gender gap in mental health has increased by 66%. The negative effect on women’s mental health cannot be explained by an increase in financial worries or childcare responsibilities.
    Keywords: mental health, gender, recessions, coronavirus
    JEL: I10 I14 I18 I30
    Date: 2020–05
  21. By: Battiston, Pietro; Kashyap, Ridhi; Rotondi, Valentina (University of Oxford)
    Abstract: Trust in science and experts is extremely important in times of epidemics to ensure compliance with public health measures. Yet little is known about how this trust evolves while an epidemic is underway. In this paper, we examine the dynamics of trust in science and experts in real-time as the high-impact epidemic of Coronavirus (COVID-19) unfolds in Italy, by drawing on digital trace data from Twitter and survey data collected online via Telegram and Facebook. Both Twitter and Telegram data point to initial increases in reliance on and information-seeking from scientists and health authorities with the diffusion of the disease. Consistent with these increases, using a separately fielded online survey we find that knowledge about health information linked to COVID-19 and support for containment measures was fairly widespread. Trust in science, relative to trust in institutions (e.g. local or national government), emerges as a consistent predictor of both knowledge and containment outcomes. However, over time and as the epidemic peaks, we detect a slowdown and turnaround in reliance and information-seeking from scientists and health authorities, which we interpret as signs of an erosion in trust. This is supported by a novel survey experiment, which finds that those holding incorrect beliefs about COVID-19 give no or lower importance to information about the virus when the source of such information is known to be scientific.
    Date: 2020–05–07
  22. By: Farbmacher, Helmut (Max Planck Society); Huber, Martin; Langen, Henrika (Faculty of Economics and Social Sciences); Spindler, Martin (Universität Hamburg)
    Abstract: This paper combines causal mediation analysis with double machine learning to control for observed confounders in a data-driven way under a selection-on-observables assumption in a high-dimensional setting. We consider the average indirect effect of a binary treatment operating through an intermediate variable (or mediator) on the causal path between the treatment and the outcome, as well as the unmediated direct effect. Estimation is based on efficient score functions, which possess a multiple robustness property w.r.t. misspecifications of the outcome, mediator, and treatment models. This property is key for selecting these models by double machine learning, which is combined with data splitting to prevent overfitting in the estimation of the effects of interest. We demonstrate that the direct and indirect effect estimators are asymptotically normal and root-n consistent under specific regularity conditions and investigate the finite sample properties of the suggested methods in a simulation study when considering lasso as machine learner. We also provide an empirical application to the U.S. National Longitudinal Survey of Youth, assessing the indirect effect of health insurance coverage on general health operating via routine checkups as mediator, as well as the direct effect. We find a moderate short term effect of health insurance coverage on general health which is, however, not mediated by routine checkups.
    Keywords: Mediation; direct and indirect effects; causal mechanisms; double machine learning; effcient score
    JEL: C21
    Date: 2020–05–01
  23. By: Martin S. Eichenbaum; Sergio Rebelo; Mathias Trabandt
    Abstract: Epidemiology models used in macroeconomics generally assume that people know their current health status. In this paper, we consider a more realistic environment in which people are uncertain about their health status. We use our model to study the impact of testing with and without quarantining infected people. We find that testing without quarantines can worsen the economic and health repercussions of an epidemic. In contrast, a policy that uses tests to quarantine infected people has very large social benefits. Critically, this policy ameliorates the sharp tradeoff between declines in economic activity and health outcomes that is associated with broad-based containment policies like lockdowns. This amelioration is particularly dramatic when people who recover from an infection acquire only temporary immunity to the virus.
    JEL: E1 H0 I1
    Date: 2020–05
  24. By: Jesús Fernández-Villaverde; Charles I. Jones
    Abstract: We use data on deaths in New York City, various U.S. states, and various countries around the world to estimate a standard epidemiological model of COVID-19. We allow for a time-varying contact rate in order to capture behavioral and policy-induced changes associated with social distancing. We simulate the model forward to consider possible futures for various countries, states, and cities, including the potential impact of herd immunity on re-opening. Our current baseline mortality rate (IFR) is assumed to be 0.8% but we recognize there is substantial uncertainty about this number. Our model fits the death data equally well with alternative mortality rates of 0.3% or 1.0%, so this parameter is unidentified in our data. However, its value matters enormously for the extent to which various places can relax social distancing without spurring a resurgence of deaths.
    JEL: E0 I0
    Date: 2020–05
  25. By: Tommy Andersson; Albin Erlanson; Daniel Spiro; Robert \"Ostling
    Abstract: This paper considers a simple model where a social planner can influence the spread-intensity of an infection wave, and, consequently, also the economic activity and population health, through a single parameter. Population health is assumed to only be negatively affected when the number of simultaneously infected exceeds health care capacity. The main finding is that if (i) the planner attaches a positive weight on economic activity and (ii) it is more harmful for the economy to be locked down for longer than shorter time periods, then the optimal policy is to (weakly) exceed health care capacity at some time.
    Date: 2020–05
  26. By: Layard, Richard; Clark, Andrew E.; De Neve, Jan-Emmanuel; Krekel, Christian; Fancourt, Daisy; Hey, Nancy; O'Donnell, Gus
    Abstract: In choosing when to end the lockdown, policy-makers have to balance the impact of the decision upon incomes, unemployment, mental health, public confidence and many other factors, as well as (of course) upon the number of deaths from COVID-19. To facilitate the decision it is helpful to forecast each factor using a single metric. We use as our metric the number of Wellbeing-Years resulting from each date of ending the lockdown. This new metric makes it possible to compare the impact of each factor in a way that is relevant to all public policy decisions.
    Keywords: Covid-19; coronavirus; Wellbeing Economics; Cost-Benefit Analysis; Health Policy
    JEL: D60 D61 I31
    Date: 2020–04
  27. By: Dhaval M. Dave; Andrew I. Friedson; Kyutaro Matsuzawa; Joseph J. Sabia
    Abstract: Shelter in place orders (SIPOs) require residents to remain home for all but essential activities such as purchasing food or medicine, caring for others, exercise, or traveling for employment deemed essential. Between March 19 and April 20, 2020, 40 states and the District of Columbia adopted SIPOs. This study explores the impact of SIPOs on health, with particular attention to heterogeneity in their impacts. First, using daily state-level social distancing data from SafeGraph and a difference-in-differences approach, we document that adoption of a SIPO was associated with a 5 to 10 percent increase in the rate at which state residents remained in their homes full-time. Then, using daily state-level coronavirus case data collected by the Centers for Disease Control and Prevention, we find that approximately three weeks following the adoption of a SIPO, cumulative COVID-19 cases fell by 44 percent. Event-study analyses confirm common COVID-19 case trends in the week prior to SIPO adoption and show that SIPO-induced case reductions grew larger over time. However, this average effect masks important heterogeneity across states — early adopters and high population density states appear to reap larger benefits from their SIPOs. Finally, we find that statewide SIPOs were associated with a reduction in coronavirus-related deaths, but estimated mortality effects were imprecisely estimated.
    JEL: H75 I18
    Date: 2020–05
  28. By: Neil W Bailey; Daniel West
    Abstract: There has been considerable public debate about whether the economic impact of the current COVID19 restrictions are worth the costs. Although the potential impact of COVID19 has been modelled extensively, very few numbers have been presented in the discussions about potential economic impacts. For a good answer to the question - will the restrictions cause as much harm as COVID19? - credible evidence-based estimates are required, rather than simply rhetoric. Here we provide some preliminary estimates to compare the impact of the current restrictions against the direct impact of the virus. Since most countries are currently taking an approach that reduces the number of COVID19 deaths, the estimates we provide for deaths from COVID19 are deliberately taken from the low end of the estimates of the infection fatality rate, while estimates for deaths from an economic recession are deliberately computed from double the high end of confidence interval for severe economic recessions. This ensures that an adequate challenge to the status quo of the current restrictions is provided. Our analysis shows that strict restrictions to eradicate the virus are likely to lead to at least eight times fewer total deaths than an immediate return to work scenario.
    Date: 2020–05
  29. By: Richard Bluhm; Maxim L. Pinkovskiy
    Abstract: As COVID-19 has spread across the globe, there is an intense search for treatments and vaccines, with numerous trials running in multiple countries. Several observers and prominent news outlets have noticed that countries still administering an old vaccine against tuberculosis—the Bacillus Calmette-Guérin (BCG) vaccine—have had fewer coronavirus cases and fewer deaths per capita in the early stages of the outbreak. But is that correlation really strong evidence that the BCG vaccine provides some defense against COVID-19? In this post, we look at the incidence of coronavirus cases along the former border between East and West Germany, using econometric techniques to investigate whether historical differences in vaccination policies account for the lower level of infection in the former East.
    Keywords: BCG vaccine; Coronavirus; Germany; COVID-19
    JEL: I18
    Date: 2020–05–11
  30. By: Carlos Garriga (Federal Reserve Bank of St. Louis); Rody Manuelli; Siddhartha Sanghi
    Abstract: We study a dynamic macro model to capture the trade-off between policies that simultaneously decrease output and the rate of infection transmission. We find that, in many cases, optimal policies require sharp initial decreases in employment followed by a partial liberal- ization that occurs before the peak of the epidemic. The arrival of a vaccine (even if only a small fraction of the population is initially vaccinated) requires a significant relaxation of stay-at-home policies and, in some cases, results in an increase in the speed of infection. The model implies that the monetary value of producing a vaccine is high at the beginning of the epidemic but it decreases rapidly as time passes. We find that the value that society assigns to averting deaths is a major determinant of the optimal policy.
    Keywords: health policy, infection transmission, vaccine, epidemic, macro model
    JEL: H75 I10 J11
    Date: 2020–05
  31. By: Thiemo R. Fetzer; Marc Witte; Lukas Hensel; Jon Jachimowicz; Johannes Haushofer; Andriy Ivchenko; Stefano Caria; Elena Reutskaja; Christopher P. Roth; Stefano Fiorin; Margarita Gómez; Gordon Kraft-Todd; Friedrich M. Götz; Erez Yoeli
    Abstract: We conducted a large-scale survey covering 58 countries and over 100,000 respondents between late March and early April 2020 to study beliefs and attitudes towards citizens’ and governments’ responses to the COVID-19 pandemic. Most respondents reacted strongly to the crisis: they report engaging in social distancing and hygiene behaviors, and believe that strong policy measures, such as shop closures and curfews, are necessary. They also believe that their government and their country’s citizens are not doing enough and underestimate the degree to which others in their country support strong behavioral and policy responses to the pandemic. The perception of a weak government and public response is associated with higher levels of worries and depression. Using both cross-country panel data and an event-study, we additionally show that strong government reactions correct misperceptions, and reduce worries and depression. Our findings highlight that policy-makers not only need to consider how their decisions affect the spread of COVID-19, but also how such choices influence the mental health of their population.
    JEL: I12 I31 I38
    Date: 2020–05
  32. By: Fetzer, Thiemo (University of Warwick); Witte, Marc; Hense, Lukas; Jachimowicz, Jon M. (Harvard Business School); Haushofer, Johannes; Ivchenko, Andriy; Cariam Stefano; Reutskaja, Elena; Roth, Christopher (University of Warwick); Fiorin, Stefano; Gomez, Margarita; Kraft-Todd, Gordon; Goetz, Friedrich M.; Yoeli, Erez
    Abstract: We conducted a large-scale survey covering 58 countries and over 100,000 respondents between late March and early April 2020 to study beliefs and attitudes towards citizens’ and governments’ responses to the COVID-19 pandemic. Most respondents reacted strongly to the crisis: they report engaging in social distancing and hygiene behaviors, and believe that strong policy measures, such as shop closures and curfews, are necessary. They also believe that their government and their country’s citizens are not doing enough and underestimate the degree to which others in their country support strong behavioral and policy responses to the pandemic. The perception of a weak government and public response is associated with higher levels of worries and depression. Using both cross-country panel data and an event-study, we additionally show that strong government reactions correct misperceptions, and reduce worries and depression. Our findings highlight that policy-makers not only need to consider how their decisions affect the spread of COVID-19, but also how such choices influence the mental health of their population
    Date: 2020
  33. By: Christian Gollier (TSE - Toulouse School of Economics - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - UT1 - Université Toulouse 1 Capitole - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Olivier Gossner (CREST - Centre de Recherche en Économie et Statistique - ENSAI - Ecole Nationale de la Statistique et de l'Analyse de l'Information [Bruz] - X - École polytechnique - ENSAE ParisTech - École Nationale de la Statistique et de l'Administration Économique - CNRS - Centre National de la Recherche Scientifique)
    Abstract: It is well-known that group testing is an efficient strategy to screen for the presence of a virus. It consists of pooling n individual samples with a single test using RT-PCR. If no individual in the group is infected, the group test is negative. Thus, a single test may reveal this crucial information. We show how group testing can be optimised in three applications to multiply the power of tests against Covid-19: Estimating virus prevalence to measure the evolution of the pandemic, bringing negative groups back to work to exit the current lockdown, and testing for individual infectious status to treat sick people. For an infection level around 2%, group testing could multiply the power of testing by a factor of 20. The implementation of this strategy in the short run requires limited investments and could bypass the current immense shortage of testing capacity.
    Date: 2020–04–08
  34. By: Falco, Paolo; Zaccagni, Sarah
    Abstract: Reminders to promote social distancing have been ubiquitous throughout the COVID-19 crisis, but little is known about their effectiveness. Existing studies find positive impacts on intentions to comply, but no evidence exists of actual behavioural change. We conduct a randomised controlled trial with a large representative sample of Danish residents, who receive different versions of a reminder to stay home as much as possible at the height of the crisis. We are the first to measure impacts on both intentions to comply and on realised actions in the following days (i.e., whether the person does stay home). We find that the reminder significantly increases people’s intentions to stay home when it emphasises the consequences of non-compliance for the respondent or his/her family, while it has not impact when the emphasis is on other people or the country as a whole. Changes in intentions, however, translate into weaker changes in actions that are not statistically significant. This is consistent with the existence of important intention-to-action gaps. Only people who are in relatively poor health are significantly more likely to stay home after receiving the reminder with an emphasis on personal and family risks. This shows that while reminders may be useful to protect groups at risk by increasing their own compliance with social distancing, such a tool is unable to change the behaviour of those who face limited personal risks but could spread the disease.
    Date: 2020–05–07
  35. By: Robert S. Pindyck
    Abstract: I use a simple SIR model, augmented to include deaths, to elucidate how pandemic progression is affected by the control of contagion, and examine the key trade-offs that underlie policy design. I illustrate how the cost of reducing the "reproduction number" R0 depends on how it changes the infection rate, the total and incremental number of deaths, the duration of the pandemic, and the possibility and impact of a second wave. Reducing R0 reduces the number of deaths, but extends the duration (and hence economic cost) of the pandemic, and it increases the fraction of the population still susceptible at the end, raising the possibility of a second wave. The benefit of reducing R0 is largely lives saved, and the incremental number of lives saved rises as R0 is reduced. But using a VSL estimate to value those lives is problematic.
    JEL: C02 H12 I10
    Date: 2020–05
  36. By: Steffen Juranek; Floris Zoutman
    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: I18 I12 H12
    Date: 2020
  37. By: de Pedraza, Pablo; Guzi, Martin; Tijdens, Kea
    Abstract: The rising numbers of COVID-19 cases and deaths, prolonged lockdowns, substantial restrictions on public life and an economic downturn negatively affect personal well-being. In this paper, we explore COVID- 19-related determinants of life dissatisfaction and feelings of anxiety using data collected from March 23 to April 30 2020 in 25 advanced and developing countries from four continents. We find that persons with better general health, with a paid job, living with a partner, daily exercising and those avoiding loneliness report less dissatisfaction and less anxiety. The presence of children and a pet in the household has no effect. Women report anxiety feelings more often than men. Older people report lower dissatisfaction and anxiety, remarkable given that the older population is among the most vulnerable in the current pandemic. Jobrelated changes due to COVID-19 such as income reduction and increase or decrease of workload are associated with more dissatisfaction and more anxiety. In reaction to the pandemic governments have adopted a range of measures. We show that restrictions on mobility and requirements to wear protective gear in public increase dissatisfaction and that the state-imposed emergency increase feelings of anxiety. We find that a growing number of confirmed COVID-19 cases increases dissatisfaction and anxiety but that this effect levels off with a higher number of cases. Our findings support targeted government policies to preserve economic security, and increase stability of employment.
    Keywords: Covid-19,life dissatisfaction,anxiety,public policy
    JEL: I31 I38 P51 D6
    Date: 2020
  38. By: Maloney,William F.; Taskin,Temel
    Abstract: The paper uses Google mobility data to identify the determinants of social distancing during the 2020 COVID-19 outbreak. The findings for the United States indicate that much of the decrease in mobility is voluntary, driven by the number of COVID-19 cases and proxying for greater awareness of risk. Non-pharmaceutical interventions such as closing nonessential businesses, sheltering in place, and school closings are also effective, although with a total contribution dwarfed by the voluntary actions. This suggests that much social distancing will happen regardless of the presence of non-pharmaceutical interventions and that restrictions may often function more like a coordinating device among increasingly predisposed individuals than repressive measures per se. These results are consistent across country income groups, with only the poorest countries showing limited effect of non-pharmaceutical interventions and no voluntary component, consistent with resistance to abandon sources of livelihood. The paper also confirms the direct impact of the voluntary component on economic activity, by showing that the majority of the fall in restaurant reservations in the United States and movie spending in Sweden occurred before the imposition of any non-pharmaceutical interventions. Widespread voluntary de-mobilization implies that releasing constraints may not yield a V-shaped recovery if the reduction in COVID risk is not credible.
    Keywords: Public Health Promotion,Transport Services,Urban Transport,Transport in Urban Areas,Telecommunications Infrastructure,Health Care Services Industry
    Date: 2020–05–12

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