On Coase and COVID-19

12 Pages Posted: 26 Apr 2020

See all articles by Darcy W E Allen

Darcy W E Allen

RMIT University

Chris Berg

RMIT University

Sinclair Davidson

RMIT University

Jason Potts

RMIT University

Date Written: April 26, 2020

Abstract

From the epidemiological perspective, the COVID-19 pandemic is a public health crisis. From the economic perspective, it is an externality and a social cost. Strikingly, almost all economic policy to address the infection externality has been formulated within a Pigovian analysis of implicit taxes and subsidies directed by a social planner drawing on social cost-benefit analysis. In this paper, we draw on Coase (1960) to examine an alternative economic methodology of the externality, seeking to understand how an exchange-focused analysis might give us a better understanding of how to minimise social cost. Our Coasean framework allows us to then further develop a comparative institutional analysis as well as a public choice theory analysis of the pandemic response.

Keywords: COVID-19, Coase theorem, externality

JEL Classification: D73, H23

Suggested Citation

Allen, Darcy and Berg, Chris and Davidson, Sinclair and Potts, Jason, On Coase and COVID-19 (April 26, 2020). Available at SSRN: https://ssrn.com/abstract=3585509 or http://dx.doi.org/10.2139/ssrn.3585509

Darcy Allen

RMIT University ( email )

440 Elizabeth Street
Melbourne, 3000
Australia

Chris Berg (Contact Author)

RMIT University ( email )

124 La Trobe Street
Melbourne, 3000
Australia

Sinclair Davidson

RMIT University ( email )

124 La Trobe Street
Melbourne, 3000
Australia

Jason Potts

RMIT University ( email )

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