We explore how household consumption responds to epidemics, utilizing transaction-level household financial data to investigate the impact of the COVID-19 virus. As the number of cases grew, households began to radically alter their typical spending across a number of major categories. Initially spending increased sharply, particularly in retail, credit card spending and food items. This was followed by a sharp decrease in overall spending. Households responded most strongly in states with shelter-in-place orders in place by March 29th. We explore heterogeneity across partisan affiliation, demographics and income. Greater levels of social distancing are associated with drops in spending, particularly in restaurants and retail.
The issue of the cost effectiveness of measures taken to tackle COVID-19 are discussed in a BMJ feature article by John Appleby, director of research and chief economist at Nuffield Trust in the UK.Appleby notes that whilst it is hard to discuss the economics of COVID-19 whilst in the midst of an “unprecedented global emergency” during which measures are being taken to minimise mortality and morbidity, the question of cost benefit is one that all health systems routinely face. Although determining cost effectiveness may be viewed as a somewhat “heartless utilitarian” process, it is essentially concerned with fair use of scarce resources. However, this can be hard to apply when rescuing people in emergency situations, which leads Appleby to raise the question “does cost effectiveness even have a role when it comes to covid-19 − undeniably an emergency?”.Although modelling has...
We analyze an approach to managing the COVID-19 pandemic without shutting
down the economy while staying within the capacity of the healthcare system. We
base our analysis on a detailed heterogeneous epidemiological model, which
takes into account different population groups and phases of the disease,
including incubation, infection period, hospitalization, and treatment in the
intensive care unit (ICU). We model the healthcare capacity as the total number
of hospital and ICU beds for the whole country. We calibrate the model
parameters to data reported in several recent research papers. For high- and
low-risk population groups, we calculate the number of total and intensive care
hospitalizations, and deaths as functions of time. The main conclusion is that
countries, which enforce reasonable hygienic measures on time can avoid
lockdowns throughout the pandemic provided...
Background: Countries can decide between one of three COVID-19 control strategies: 1) elimination (e.g., some island countries); 2) suppression, to low infection rates; 3) or mitigation, as per pandemic influenza strategies with ensuing herd immunity. This paper quantifies the health (direct COVID-19 impact, and indirect through unemployment onto self-harm and road traffic crash) and cost (health system and societal) consequences for these strategies across Australia, New Zealand (NZ) and Sweden. Methods: We used proportional multistate lifetable (PMSLT) models for each country, with mortality and morbidity data from the Global Burden of Disease Study and health system expenditure from country-specific sources. Feeding into the PMSLT were monthly SARS-CoV-2 infection rates (0.1%/2.5%/60% for elimination/suppression/mitigation by 18 months), and anticipated changes in unemployment...
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...
With the coronavirus disease 2019 (COVID-19) pandemic, one of the major concerns is the direct medical cost and resource use burden imposed on the US health care system. We developed a Monte Carlo simulation model that represented the US population and what could happen to each person who got infected. We estimated resource use and direct medical costs per symptomatic infection and at the national level, with various “attack rates” (infection rates), to understand the potential economic benefits of reducing the burden of the disease. A single symptomatic COVID-19 case could incur a median direct medical cost of $3,045 during the course of the infection alone. If 80 percent of the US population were to get infected, the result could be a median of 44.6 million hospitalizations, 10.7 million intensive care unit (ICU) admissions, 6.5 million patients requiring a ventilator, 249.5...
Covid-19 induced job losses occurred predominantly in industries with intensive worker-client interaction as well as in pink-collar and blue-collar occupations. We study the ability of fiscal policy to stabilize employment by occupation and industry during the Covid-19 crisis. We use a multi-sector, multi-occupation macroeconomic model and investigate different fiscal policy instruments that help the economy recover faster. We show that fiscal stimuli foster job growth for hard-hit pink-collar workers, whereas stimulating blue-collar job creation is more challenging. A cut in labor taxes performs best in stabilizing total employment and the employment composition.
The Covid-19 pandemic has motivated a myriad of studies and proposals on how economic policy should respond to this colossal shock. But participants in this debate seldom recognize that the health shock is not entirely exogenous. Its magnitude and dynamics themselves depend on economic policies, and the explicit or implicit incentives those policies provide. To illuminate the feedback loops between medical and economic factors we develop a minimal economic model of pandemics. In the model, as in reality, individual decisions to comply (or not) with virus-related public health directives depend on economic variables and incentives, which themselves respond to current economic policy and expectations of future policies. The analysis yields several practical lessons: because policies affect the speed of virus transmission via incentives, public health measures and economic policies can...
Background The Severe Acute Respiratory Syndrome Coronavirus 2 (SARS-CoV-2) was first reported in China, which caused a respiratory disease known as Coronavirus Disease 2019 (COVID-19). Since its discovery, the virus has spread to over 100 countries and claimed more than 4000 deaths. This study aimed to assess the effectiveness and cost-effectiveness of various response public health measures. Method The stochastic agent-based model was used to simulate the process of COVID-19 outbreak in scenario I (imported one case) and II (imported four cases) with a series of public health measures, involving the personal protection, isolation-and-quarantine, gathering restriction, and community containment. The virtual community was constructed following the susceptible-latent-infectious-recovered framework. The epidemiological and economic parameters derived from the previous literature and...