The Cost of Privacy: Welfare Effects of the Disclosure of Covid-19 Cases
42 Pages Posted: 15 May 2020
Date Written: May 14, 2020
South Korea publicly disclosed detailed location information of individuals that tested positive for COVID-19. We quantify the effect of public disclosure on the transmission of the virus and economic losses in Seoul. We use detailed foot-traffic data from South Korea's largest mobile phone company to document the change in the flows of people across neighborhoods in Seoul in response to information on the locations of positive cases. We analyze the effect of the change in commuting flows in a SIR meta-population model where the virus spreads due to these flows. We endogenize these flows in a model of urban neighborhoods where individuals commute across neighborhoods to access jobs and leisure opportunities. Relative to a scenario where no information is disclosed, the change in commuting patterns due to public disclosure lowers the number of cases by 400 thousand and the number of deaths by 13 thousand in Seoul over two years. Compared to a city-wide lock-down that results in the same number of cases over two years, the economic cost is 50% lower with full disclosure.
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